Lake County settles with ORIX
Lake County’s legal battle with ORIX Public Finance should be over soon.
According to meeting minutes published online, the county has spent around $200,000 defending itself in the broadband-related lawsuit, which alleged that the county owed Texas-based investment firm ORIX $5 million in damages after backing out of a bond purchase agreement.
On March 4 following a closed meeting, the county board of commissioners passed a resolution approving a settlement with ORIX. While the settlement hasn’t yet been signed, county administrator Matt Huddleston said it should be within two or three weeks.
In the settlement, the county has agreed to pay $15,000 to ORIX, but without admitting liability. Agreeing to the settlement allows the county to end a two-year legal battle with the company and avoid taking their case to the Eighth Circuit Court of Appeals.
In December, the News-Chronicle reported that the battle was over. The county had prevailed in a summary judgment issued by Minnesota District Court Chief Judge Michael Davis.
However, ORIX soon appealed the ruling, leading the county to hammer out a settlement with them.
The story began in Dec. 2010, when ORIX agreed to buy up to $6 million in bonds at a 12 percent interest rate to help fund the countywide broadband project. The network is being built with mostly federal dollars but required a $3.5 million match from the county.
The federal agency overseeing the project wouldn’t approve the bond agreement. The Rural Utility Service (RUS) said it would not fund the project if the county went forward with selling the bonds. Without RUS’s approval, Lake County had to back out of the agreement, instead using $3.5 million from its general fund.
ORIX said that this breach of contract had cost them close to $5 million in profits, according to court documents. The county countered that RUS’s threat to withdraw funding meant there was no purpose to the agreement. The most recent ruling sided with the county, but an appeal by ORIX meant that more legal wrangling was in store.
Since the settlement isn’t finalized, county officials wouldn’t comment on the case. The commissioners voted unanimously to approve the agreement. Commissioner Rich Sve was absent.