Town Square

Post a New Topic

Court denies schools recovery of $20 million in losses from Lehman Brothers bankruptcy

Original post made on Feb 1, 2013

A state appeals court on Thursday approved the dismissal of a lawsuit brought against San Mateo County by 12 county school districts – including the Menlo Park City, Las Lomitas, Portola Valley and Woodside districts – over the collective loss of about $20 million in investments resulting from the 2008 Lehman Brothers collapse.

Read the full story here Web Link posted Friday, February 1, 2013, 10:08 AM

Comments (9)

 +   Like this comment
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Feb 1, 2013 at 12:34 pm

How many of the school districts were expecting a hefty return on investment of tax-exempt bond proceeds?


 +   Like this comment
Posted by Bill
a resident of Portola Valley: Central Portola Valley
on Feb 1, 2013 at 1:25 pm

Jack, probably none. The problem is that by law the school districts are required to park their money in the county's investment pool. You think the treasurer is an out-of-control gambler who shouldn't be trusted with your money? Too bad. He doesn't even have to return your phone calls, much less keep your powder dry. Portola Valley and Woodside school districts were (relatively) lucky; they'd already spent most of their bond money. The losses were allocated based on the balance at the time of the loss, so districts that had just raised money got hit hardest, and the districts which might have enjoyed appreciably more income over the years got off with less of a haircut. It's akin to buying a mutual fund about to make a big distribution a few days before the ex-dividend date, instead of years before.


 +   Like this comment
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Feb 1, 2013 at 2:10 pm

Bill, you said: "...by law the school districts are required to park their money in the county's investment pool." I've heard that before, but have not seen citations to support that contention. Perhaps you can provide a link.


 +   Like this comment
Posted by mad
a resident of Menlo Park: Downtown
on Feb 2, 2013 at 8:05 am

Jack, do you want each school district to hold onto millions in payroll? Really? Like those people are bankers or accounts? The MONEY was to be used for payroll and building it wasn't supposed to be in anything adventurous at all. PERIOD. Someone should have been fired at the very least. No one had any clue that the county was being so stupid. Then again the same county turned down 10 million dollars..... so go figure. It's not like the county pays any other entity any interest on the money it holds as far as I know. I do know that that those who COULD pull their money away have most likely done so since that time and put them into secure CD's
The FEDERAL GOVERNMENT should have made the PEOPLE's money whole again before bailing out businesses and banks.


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Feb 2, 2013 at 8:11 am

Peter Carpenter is a registered user.

"Jack, do you want each school district to hold onto millions in payroll?"

The Fire District does exactly that - and it is about the only local government entity that has a balanced budget, reserves and almost no unfunded pension liability. It is called good government and good management.


 +   Like this comment
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Feb 2, 2013 at 11:07 am

Well said, Peter.

mad said: "It's not like the county pays any other entity any interest on the money it holds as far as I know."

If they didn't, the school districts would not have put their money there.


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Feb 2, 2013 at 12:38 pm

Peter Carpenter is a registered user.

The superb financial manager at the Fire District saw the county's poorly diversified investment of the county pool and pulled the fire district's funds out of that pool before the Goldman collapse. If the school district's could not have pulled their funds did they at least insist that the county more properly diversify its investments at that same time?


 +   Like this comment
Posted by GREAT
a resident of Menlo Park: Downtown
on Feb 5, 2013 at 8:24 pm

Pete you and Jack go to the county and get THEM to turn over all the money to the school districts (and then figure out how each district is going to PAY to manage that money...)

The money should be invested in SECURE CD's etc. LOCAL investments. Period. They broke their own rules and had way too much invested in Lehman in something that was "IFFY"..... given the investments were given great ratings by a hack American company that was in on the fix should be even more reason that the American GOVERNMENT should have used our money to pay off PUBLIC entities before paying off the BANKS that created the whole problem.

It's just GREAT that the fire department figured out how to do their funding........ NOW... Jack... tell me how they manage to "FUND" their pensions....?? Old firemen I'm sure could keep working a desk OR being totally honest... they are perfectly CAPABLE of working other jobs at their early retirement age. Do they contribute to their pensions? If so, do they really FUND them?

Jack....... you think the teachers' fund should fork over money to Soc. Security?? I contribute MORE to my pension than anyone contributes to their Soc. Sec. and the money that I put into the Soc. Sec. system before teaching is GONE........ nothing I can do about that except maybe work after retiring so that I could get SOME of it.

I have ABSOLUTELY NO FAITH in the county. I'm sure there are those who are still happy they turned down 10 million dollars, but I have yet to see the county do anything to fix the Alpine problems OR find the MONEY to do anything. I'm quite sure that they continue to PAY people to "think" about doing something that Stanford would have already been FINISHED with by now.


 +   Like this comment
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Feb 7, 2013 at 9:43 am

GREAT, your comment re: Soc. Security belongs in another topic Web Link
Unanswered questions in this topic include:
Bill, you said: "...by law the school districts are required to park their money in the county's investment pool." I've heard that before, but have not seen citations to support that contention. Perhaps you can provide a link.

and,

How many of the school districts were expecting a hefty return on investment of tax-exempt bond proceeds?
Probably none does not qualify as an answer.


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Email:


Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

Tin Pot Creamery expanding to Los Altos
By Elena Kadvany | 1 comment | 5,166 views

reThink Farming Planet Enemy #1
By Laura Stec | 17 comments | 2,907 views

It Can Wait
By Cheryl Bac | 4 comments | 2,691 views

Truly Loved
By Chandrama Anderson | 2 comments | 2,141 views

Hit the Bus
By Paul Bendix | 3 comments | 297 views