1984-68 Authorizing Staff To Pursue All Avenues Prudent And Reasonable To The Collection Of Investments Held By The Courts Under Chapter 11 (Reorganization) Bankruptcy.1
KODIAK ISLAND BOROUGH
RESOLUTION NO. 84 -68 -R
A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY AUTHORIZING STAFF
TO PURSUE ALL AVENUES PRUDENT AND REASONABLE TO THE COLLECTION OF INVESTMENTS
HELD BY THE COURTS UNDER CHAPTER 11 (REORGANIZATION) BANKRUPTCY.
WHEREAS, the Kodiak Island Borough invested two million dollars
with the Lion Capital Group, 120 Wall Street, New York, New York,
collateralized at 102 %, by $2,020,000 of U.S. Treasury Bonds, 12% issue of
8- 15 -83, under CUSIP No. 912810DF2; and
WHEREAS, such investments were short term with $1 million due to
mature on May 21, 1984 and $1 million due to mature on June 11, 1984; and
WHEREAS, the Lion Capital Group filed a Chapter 11 (reorganization)
bankruptcy on May 3, 1984; and
WHEREAS, some thirty -one (31) school districts and other municipal
entities that were investors in the Lion Capital Group at the time Lion filed
for bankruptcy have since formed a creditors committee and have employed the
law firm of Anderson, Russell, Kill and Olink of New York City to represent
the group and their mutual interest; and
WHEREAS, the trustee bank (Bradford Trust, a Wall Street bank of New
York City) has filed a legal action to claim that the collateral belongs to
the bank rather than to the investors; and
WHEREAS, a firm trial date of August 27, 1984 has been set to
resolve the conflict of claims to collateral between Bradford Trust and the
municipal entities; and
WHEREAS, the bankruptcy hearings will tend to hold all parties'
claims in an equal light; and
WHEREAS, the creditors' committee through their attorneys have filed
legal action to make the claims of Bradford Trust subordinate to the municipal
claims; and
WHEREAS, such legal proceedings will cost between $100,000 and
$500,000 and the creditors' committee has agreed, as a body, to share this
cost pro rata to their investment (for the Kodiak Island Borough the cost will
be $5,150 to a maximum of $25,750); and
WHEREAS, the past borough manager has verbally given the finance
director the authority to "do what is necessary and prudent to protect the
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interests of the borough" and by this authority the finance director has made
three trips to meetings in New York, twice accompanied by our bond council of
Wohlforth & Flint of Anchorage.
NOW, THEREFORE, BE IT RESOLVED that the Kodiak Island Borough
Assembly ratifies that the acts of borough staff in this regard as being
necessary and prudent to protect the interests of the borough.
NOW, THEREFORE, BE IT FURTHER RESOLVED that the Assembly directs
staff to pursue any and all legal and prudent acts necessary in an attempt to
achieve an early settlement of this matter in the best interest of the
borough.
ATTEST:
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Resolution No. 84 -68 -R
KODIAK ISLAND BOROUGH
PASSED AND APPROVED this 5th day of July 1984.
B gh Manager