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T( 'BOARD OF SUPERVISORS
FROM-Victor J.Westman,County Counsel
By:Dennis C.Graves,Deputy
DATE: December 11, 1998
SUBJECT: Approval of Settlement of Bank of America Litigation
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
1. RECOMMENDATIONS
On behalf of the County, the County Redevelopment Agency, the County Public Facilities
Corporation, and any other plaintiff agencies governed by the Board, (collectively the "Contra
Costa Plaintiffs"), approve the settlement proposed in State of California ex. rel. Stull v Bank of
America, San Francisco Superior Court number 968-484 (the "Stull case") and related class
action; authorize filing of claims in said litigation; authorize County Counsel to sign all
documentation to effect the settlement, including the Agreement governing distribution of the
settlement proceeds among the plaintiffs.
IL FISCAL IMPACT
The rough estimate of the amount to be recovered by the Contra Costa Plaintiffs is between
$500,000 and $1,000,000.
Ill. BACKGROUND/REASONS FOR RECOMMENDATIONS
The subject action was filed by qui tam plaintiff Patrick Stull, the California Attorney General, and
the City and County of San Francisco, primarily to recover unclaimed bond funds that Bank of
America and Security Pacific Bank, as paying agents, failed to return to issuers or escheat to
public agencies. Represented by the San Francisco City Attorney, the Contra Costa Plaintiffs and
approximately 200 other California local agencies joined the Action as plaintiffs in intervention.
After approximately two years of very contentious, time-consuming, and expensive litigation, in
which the San Francisco City Attorney played the leading role, this extremely complex case has
been settled for a total of approximately $200,000,000.
CONTINUED ON ATTACHMENT: X-YES SIGNATUR
RECOMMENDATION OF COUNTY ADMINISTRATOR—RECOMMENDATION VOBOARD COMMITTEE
—APPROVE —OTHER
SIGNATURE(S):
ACTION OF BOARD ON 1/5Z99 APPROVED AS RECOMMENDED
,,._OTHER_
VOTE OF SUPERVISORS:
I HEREBY CERTIFY THAT THIS IS A
v--UNANIMOUS(ABSENT TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
ATTESTED: i , � /Iq
PHIL BATCHELOR, CLERK OF
THE BOARD OF SUPERVISORS
AND COUNTYADMINISTRATOR
Contact:Dennis Graves(335-1833)
Deputy County Counsel
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BackgroundfReasons continued:
A class action also was filed by the primary plaintiffs, representing a class consisting of
all public agency bond issuers in California that have employed the defendant;Banks as
paying agents and trustees. The Court is expected to approve the class action settlement
and the settlement of the subject action within three months. The amount available for
distribution to the Contra Costa claimants will depend upon the claims not yet filed by
agencies that are class members but that have not participated in the Stull case. Also, the
amount available to the Contra Costa plaintiffs will depend upon the final accounting of the
total provable amount of our issuances and our percentage of bearer, registered and mixed
bonds among those issuances. Although this amount can only be estimated at present, the
economists employed by the plaintiffs lead us to conclude that we may obtain;a total of
$500,000 to $1,000,000. This would be in addition to the roughly $50,000 already recovered,
which had covered our out of pocket expenses in the litigation. The Administrator is in the
process of determining the distribution of the proceeds that may be available to the Contra
Costa plaintiffs, which includes the Public Facilities Corporation, the Redevelopment Agency
and the Assessment Bond Agencies.
Staff of the Administrator's Office, the Redevelopment Agency, the General Services
Department , the Auditor's Office and the County Counsel's Office have been involved in this
litigation and jointly recommend approval of the settlement
cc:Administrator
Redevelopment Agency
Auditor
County Counsel
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