Thursday, January 18, 2018
News Roundup

St. Petersburg City Council approves $11.1 million settlement with Wells Fargo

ST. PETERSBURG — Taxpayers will get back $11 million in bad investments made with Lehman Brothers, the Wall Street firm that went bankrupt in 2008.

The City Council unanimously agreed to a settlement with Wells Fargo on Thursday after suing the financial giant to try to recoup $15 million in risky investments made by Wachovia Securities. Wells Fargo bought Wachovia in 2009.

While all the money hasn't hit city coffers, the "money should change hands in the next couple of weeks," said Jacqueline Kovilaritch, an assistant city attorney.

So far, the city has received $2.2 million in bankruptcy distributions from its Lehman investments. An additional $8.8 million will come from a cash payment and proceeds from selling its remaining Lehman investments.

The money, city officials cautioned, won't erase the $3 million deficit in this year's budget or help give employees raises next year.

After reimbursing the general fund for expenses spent fighting the case, the remainder will go into the city's investment funds, which took losses that were written off several years ago.

The city estimates its legal expenses at $2 million.

"We've always talked about redistributing the money to the funds," city Administrator Tish Elston said. "That's the most appropriate way to account for it."

The case went to trial in early 2012.

After six days of testimony, jurors sided with city officials, who blamed Wachovia for losses it incurred when Lehman Brothers collapsed. Seven jurors spent more than four hours deliberating the case and awarded the city $10.4 million for its losses.

Wells Fargo and the city appealed parts of the verdict.

At the time, the losses were about $15 million. But Lehman Brothers had emerged from bankruptcy, and the bonds the city held were worth about $4 million in 2012.

The city accused Wachovia of failing to alert it to three credit downgrades in the summer of 2008, a sign of corporate trouble. While they couldn't show documented evidence that the city was warned about the downgrades, Wells Fargo lawyers argued that the city had plenty of information about Lehman's issues and should have known better.

Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.

Comments

High school scoreboard for Jan. 17

Wednesday’s scoreboardBoys basketballBoca Ciega 62, Clearwater 52Boys soccerPalm Harbor U. 3, Dunedin 0Girls soccerPalm Harbor U. 5, Dunedin 0
Updated: 2 hours ago
‘All I see is fire’: 911 calls released from Florida casino boat fire

‘All I see is fire’: 911 calls released from Florida casino boat fire

PORT RICHEY — The first call came into emergency dispatch at 4 p.m. on Sunday from shore, reporting a ‘giant’ boat on fire in the Pithlachascotee River."It’s urgent," the caller said.Others followed quickly, one woman crying as she described from her...
Updated: 3 hours ago
Shelters offer escape from the cold for those who need it

Shelters offer escape from the cold for those who need it

On warmer nights, Jerry Hardison can sleep for a few hours at the recycling center. He works 11-hour shifts there. He gets off at 2:30 a.m., then waits until the buses start running again.But not Wednesday."Getting out that time of the morning in the...
Updated: 3 hours ago
Apple to build second campus, hire 20,000 in $350B pledge

Apple to build second campus, hire 20,000 in $350B pledge

Associated PressSAN FRANCISCO — Apple is planning to build another corporate campus and hire 20,000 workers during the next five years as part of a $350 billion commitment to the United States that will be partially financed by an upcoming windfall f...
Updated: 4 hours ago
Michigan father deported after three decades in community; AIDS crusader Mathlide Kim dies; more in U.S. news

Michigan father deported after three decades in community; AIDS crusader Mathlide Kim dies; more in U.S. news

Michigan This was his home for 30 years, then ICE forced dad from familyWith two immigration agents hovering nearby, Jorge Garcia pulled his wife and their 15-year-old daughter and 12-year-old son close for a final hug at the Detroit airport. Soon af...
Updated: 5 hours ago
Gibsonton man faces 50 counts of child porn

Gibsonton man faces 50 counts of child porn

GIBSONTON — A 46-year-old man was arrested Wednesday by Florida Department of Law Enforcement agents on 50 counts of possession of child pornography and one count of promoting a sexual performance by a child.Authorities said they received several tip...
Updated: 6 hours ago

He still has nightmares: Deckhand recalls prior casino boat fire

Cory Byrd said he still has nightmares about the smoke. In them, he is back in the cabin of the Express Shuttle II, scrambling to reach the white rectangle of an open door. The smoke was so thick, he said, you could barely see an outstretched hand. ...
Updated: 6 hours ago
Wallaby bounds down Sydney Harbour Bridge; North, South Korea to march as one in Olympics; more in world news

Wallaby bounds down Sydney Harbour Bridge; North, South Korea to march as one in Olympics; more in world news

AustraliaWallaby infiltrates Sydney bridgeA wayward wallaby disrupted downtown traffic by bounding across the Sydney Harbor Bridge on Tuesday with police in pursuit. The adult male was captured without any apparent serious injury and is expected to b...
Updated: 7 hours ago
Pinellas sheriff, feds announce changes to controversial immigrant detention policy

Pinellas sheriff, feds announce changes to controversial immigrant detention policy

LARGO — For years, county sheriffs in the United States have faced a quandary when asked by federal officials to hold undocumented immigrants in their local jails. They could continue to hold them for up to two days past the time they were legally fr...
Updated: 7 hours ago
Water Street Tampa developers seek artist and design for $600,000 outdoor art near USF med school

Water Street Tampa developers seek artist and design for $600,000 outdoor art near USF med school

TAMPA — Water Street Tampa called Wednesday for artists to send in their ideas for a big piece of public art for the outdoor plaza between one of the $3 billion project’s office buildings and the new University of South Florida Morsani College of Med...
Updated: 8 hours ago