Rio School District still on hook for $5.5 million debt

Judgment it owed company sold for assets, appeal is pending

By David Michael Courtland 11/21/2012

 

A year after a judge ruled that Rio School District has to pay $5.5 million to the construction company that built Rio del Norte Elementary School, that company is on the brink of bankruptcy and Rio remains on the hook for the money pending an appeal.


A public collateral sale was held Tuesday for FTR International Inc., triggered by its creditor East West Bank foreclosing on a loan. Among the assets for sale were the rights to the judgment against Rio.


Assistant Superintendent for Business Services Mark Krueger said Friday that normal creditor law applies and if the district should lose its appeal, it will simply owe the $5.5 million to whoever bought FTR’s assets.


Earlier this year several of FTR’s creditors joined a federal bankruptcy trustee in a motion to force FTR International into Chapter 7 — or involuntary — bankruptcy, but a judge later dismissed that filing.


Rio is contesting charges that FTR says it is owed for work and delays on the $7.3 million Rio del Norte Project, which started in November 1999 and ended in September 2001.


In September 2011, after a trial that lasted several years, Ventura Superior Court Judge William Liebmann awarded FTR International $2.9 million as well as $2.6 million in penalties and interest.


Rio’s attorney, James Negele, said the judgment has been appealed because of “mistakes in the law” made during the trial, but declined to elaborate, explaining that the reasons were too complicated to go into over the phone.


In 2010 FTR’s lawsuit became a campaign issue when it gave $20,000 to a committee supporting a slate of candidates for the Rio school board who were opposing incumbents Robert Guillen and Ron Mosqueda.


Former Superintendent Sherianne Cotterell alleged during the campaign that FTR was trying to buy support for a settlement from challengers Eleanor Torres, Ramon Rodriguez and Henrietta Macias.


Later in 2011, however, when Trustees Tim Blaylock and Mike Barber asked the Ventura district attorney to determine whether the donation was a conflict of interest, Greg Totten’s office found there was no violation of campaign law because the money went to committee expenses the candidates had no control over.  

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