A dozen Peninsula school districts will appeal a judge’s decision to dismiss their lawsuit against San Mateo County’s former treasurer, whom they say was responsible for the loss of $20 million in school district funds that the county invested in Lehman Brothers.
“I was disappointed, but we certainly are going to continue down the path of an appeal,” said county school Superintendent Anne Campbell, whose county Office of Education is also a plaintiff in the suit. “We’re in this for the long haul.”
After a hearing last week, San Francisco Superior Court Judge Richard Kramer found that former county treasurer Lee Buffington, who managed a pool of funds from local agencies, could not be sued for discretionaryV investment decisions.
Although the judge decided that the districts had filed the suit in a timely manner, he also said that there was no contract between the school districts and the county.
However, school districts lawyer Farley Neuman said state law says the county treasurer had to adhere to prudent investment strategies, meaning he should have avoided placing too much money in any one fund. According to documents filed with the court, less than a month before Lehman collapsed, the county had 17 percent of its holdings invested there.
“Frankly, it’s baffling to us,” Neuman said of the ruling. “We’re confident we will get up to the court of appeals.”
Michael Celio, a lawyer for the county, said the dismissal was good news for taxpayers, because defending such a lawsuit would have been costly for the county.
“You’re really just taking from one pocket of the public and putting it in another pocket of the public,” he said.
The county, which lost a total of $155 million in the 2008 collapse of Lehman Brothers — the most of any local government nationwide — is suing former executives at the defunct investment bank.
“Really, that’s where we think the energy should be directed,” Celio said. “Those are the people responsible.”
Peninsula school districts lost $20 million in the collapse of Lehman Brothers. The districts are suing the county to recover the following amounts:
San Mateo Union High: $5.8 million
Menlo Park City: $3.9 million
San Mateo County Office: $2.3 million
Belmont-Redwood Shores: $1.6 million
Cabrillo: $1.4 million
Burlingame: $1.2 million
Jefferson Elementary: $981,156
Ravenswood City: $854,536
San Bruno Park: $728,648
San Carlos: $583,877
Las Lomitas: $396,738
Portola Valley: $172,778
Source: San Mateo County Office of Education