Monticello city leaders unanimously approved a FiberNet bondholder settlement document Sept. 23 without pulling the consent agenda item for discussion.
In a background memo to council, City Attorney Joel Jamnik and City Administrator Jeff O’Neill explained why the final settlement document for FiberNet bond claims appeared as a consent item.
According to Jamnik, in June, the Monticello City Council approved a term sheet outlining a settlement resolving possible claims by bondholders of outstanding FiberNet bonds.
The term sheet contemplated that the parties and their attorneys would incorporate the provisions of the term sheet into a detailed settlement agreement which, when executed, would serve as the complete and enforceable agreement.
In his reference and background memo to council, Jamnik stated: “Given the complexities involved with effecting the settlement [including coordinating two separate lawsuits in two different courts], it has taken the attorneys longer than originally estimated to prepare the more detailed final settlement document,” he stated.
The document approved Monday night by the city council outlines the process of implementing the term sheet, and is consistent with the terms previously agreed to by the parties. “There have been no changes to the previous terms,” Jamnik wrote. The previously agreed settlement amount remains $5.75 million, he said.
The settlement agreement contemplates that following execution of the settlement agreement, Wells Fargo Bank N.A. will file a trustee instruction proceeding in Minnesota state court to address the bondholders’ claims under a trust indenture that accompanied the 2008 bond issuance.
Jamnik stated bondholders subsequently will file a federal class action lawsuit to address bondholder’s claims that arise outside of trust and bond documents.
See this week’s print edition of the Monticello Times for the complete story.