Refco vs City/Settlement Agree 98SETTLEMENT AGREEMENT AND MUTUAL RELEASES
This SETTLEMENT AGREEMENT AND MUTUAL RELEASES (the
"Agreement") is made and entered as of July 31, 1998, among Refco, Inc., Refco
Securities, Inc., Refco Capital Corporation and Refco Group, Ltd. (collectively, 'Refco
Entities") and the City of La Quinta and the La Quinta Redevelopment Agency
(collectively, "La Quinta").
WHEREAS, on or about January 29, 1994, La Quinta filed a Second
Amended Complaint ("Complaint') in the United States District Court for the Central
District of California ("Court"), against the Refco Entities, and others, in a case entitled
City of La Quinta and La Quinta Redevelopment Agency v. Refco Group. Ltd., et al.,
Case No. CV 92-7626-RJK ("Action"); and
WHEREAS, La Quinta has asserted claims in the Action against the Refco
Entities relating to losses suffered in its investment portfolio; and
WHEREAS, the Refco Entities deny all material allegations of the
Complaint, maintain that their conduct has been legal and proper in all respects and
continue to deny any and all fault or liability thereunder; and
WHEREAS, the parties hereto, in order to save the expense of a protracted
trial and avoid the uncertainties associated with continuing the Action, wish to settle and
discontinue the Action and to release each other from any and all liability connected
therewith, with the understanding that the releases do not constitute an admission of any
liability, wrongdoing of any nature, or the lack of merit of any claims or defenses
asserted in the action, or illegal conduct, or any fault of the parties;
hereto, that:
IT IS HEREBY STIPULATED AND AGREED, by and among the parties
1. In order to induce the Refco Entities to enter into this Agreement and
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to pay La Quinta the amount referred to in paragraph 3 hereof, La Quinta represents and
warrants that it knows of no claim or claims that have been asserted against La Quinta
regarding or stemming from the alleged activities of Steven D. Wymer, Denman &
Company, Institutional Treasury Management, Inc. or any entity affiliated with Mr. Wymer
(collectively, "Wymer'). La Quinta further represents that it has not been informed by
any entity that it intends to assert claims against La Quinta regarding or stemming from
Wymer's alleged activities.
2. La Quinta further represents and warrants that it has not assigned,
conveyed or otherwise transferred to any person or entity any claim or right of action of
any kind against the Refco Entities or other persons or entities released pursuant to
paragraph 5 of this Agreement.
3. Upon execution of this Agreement by ,all parties, and receipt by
Graubard Mollen & Miller, counsel for the Refco Entities, of this Agreement duly signed
by La Quinta, as provided in paragraph 12 hereof, together with the documents referred
to in that paragraph 12, and in settlement of the Action, the Refco Entities shall pay to
La Quinta the sum of Nine Hundred Thirty -Seven Thousand Five Hundred Dollars
($937,500.00). The payment shall be made by wire -transfer to Wells Fargo, ABA No.
121000248, for credit to City of La Quinta Account No. 4159282482, Attn.: John
Falconer.
4. Upon receipt of the payment described in paragraph 3 above,
Stradling, Yucca, Carlson & Rauth, counsel for La Quinta, shall file with the Court a
stipulation of dismissal, with prejudice and without costs, of the Action ("Stipulation of
Dismissal").
5. La Quinta, for itself and its past and present public officials, elected
representatives, attorneys, administrators, agents, employees, other representatives, and
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successors and assigns, does hereby release, and discharge the Refco Entities, and
each of them, and their respective present and former affiliates, parents, subsidiaries,
officers, directors, trustees, partners, stockholders, employees, attorneys, agents,
representatives, administrators, insurers, sureties, successors and assigns (collectively,
"Released Parties"), from all actions, causes of action, suits, debits, dues, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controver-
sies, agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever, in law, admiralty or equity, which against
Released Parties La Quinta, its present and former public officials, elected rep-
resentatives, employees, agents, attorneys, administrators, representatives, successors
and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by
reason of any matter, cause or thing which in any way relates to or arises out of any
matter asserted, or which could have been asserted in the Action, or elsewhere,
including, without limitation, for any conduct or inaction of Kimberly Goodman, from the
beginning of the world to the day and date of this Agreement.
6. The Refco Entities, and each of them, for themselves and their
respective present and former affiliates, parents, subsidiaries, officers, directors, trustees,
partners, stockholders, employees, attorneys, agents, representatives, administrators,
successors and assigns do hereby release and discharge La Quinta and its present and
former public officials, elected representatives, employees, agents, representatives,
attorneys, insurers, sureties, successors and assigns (collectively, "La Quinta's
Representatives"), from all actions, causes of action, suits, debits, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents, executions,
claims, and demands whatsoever, in law, admiralty or equity, which against La Quinta
and La Quinta's Representatives the Released Parties ever had, now have or hereafter
can, shall or may have, for, upon, or by reason of any matter, cause or thing which in
any way relates to or arises out of any matter asserted, or which could have been
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asserted in the Action, or elsewhere, from the beginning of the world to the day and date
of this Agreement.
7. Notwithstanding the foregoing, La Quinta does not release Kimberly
Goodman, individually, from any claims, liabilities, judgments, orders, or obligations to
La Quinta. However, it is the intent of the parties by this Agreement to release fully and
completely the Refco Entities from any and all claims relating to Goodman's activities,
as set forth in paragraph 5, above.
8. The parties to this Agreement agree, represent and warrant that the
matters released herein are not limited to matters which are known or disclosed, and
waive any and all rights and benefits which they now have, or in the future may have,
conferred upon them by virtue of the provisions of Section 1542 of the Civil Code of the
State of California, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AF-
FECTED HIS SETTLEMENT WITH THE DEBTOR.
All parties expressly. acknowledge that the effect and import of this
provision has been fully explained to them by their own counsel.
9. The parties to this Agreement agree that they will execute any and
all additional documents necessary to effect the implementation of the provisions
contained herein.
10. The parties to this Agreement hereby acknowledge that, except as
provided for elsewhere herein, this Agreement is a complete accord and satisfaction of
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all disputes, claims, causes of action, and counterclaims that have been or may have
been asserted or filed. No party shall seek any further remedy, including an order
compelling discovery, from the other party in the Action.
11. This Agreement shall be deemed to fall within the broadest
protections afforded compromises and offers to compromise by Rule 408 of the Federal
Rules of Evidence and any comparable provisions of state law.
12. Each of the parties to this Agreement represents and warrants that
it has full authority to execute the Agreement and to bind itself to the Agreement by
execution hereof, that each party has obtained all necessary legal approvals to enter into
this Agreement, and that the execution and delivery of this Agreement will not violate any
agreement, court order, administrative order of any governmental entity, or any law or
governmental regulation. Each party to this Agreement shall submit concurrent with the
execution of this Agreement a resolution or other satisfactory document indicating that
the signatory for that party is vested with the authority to bind the party for purposes of
this Agreement.
13. La Quinta hereby acknowledges that the Agreement was negotiated
and executed in good faith and that the terms of this Agreement, including those set
forth in paragraph 3 hereof, are within the reasonable range of the Refco Entities'
potential share and percentage of liability, if any, for La Quinta's damages, taking in to
account the facts and circumstances of the Action, as enunciated in Tech-Bilt v.
Woodward Clyde & Assoc., 38 Cal. 3d 488, 213 Cal. Rptr. 256 (1985). La Quinta further
agrees to assist the Refco Entities should the Refco Entities seek a judicial determination
regarding the good faith nature of the Agreement and/or an order barring contribution
claims. This assistance may include, but is not limited to, providing the Refco Entities
with declarations and/or other evidence supporting the good faith nature of the
Agreement, consistent with preserving the confidentiality of information or documents
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protected from disclosure by the attorney -client privilege and/or attorney work. product
doctrine.
14. This Agreement may be executed in multiple counterparts and shall
become effective when it has been signed by duly authorized representatives of each
of the parties, the sum set forth in paragraph 3 has been paid, and the Stipulation of
Dismissal is filed.
15. This Agreement is binding upon, and shall inure to the benefit of, the
Refco Entities, La Quinta and their respective successors and assigns.
16. This Agreement reflects the joint drafting efforts of each party hereto
in consultation with their respective legal counsel. In the event of any dispute,
disagreement, or controversy regarding the Agreement, the parties shall be considered
joint authors and no provision shall be interpreted against any party because of putative
authorship. The parties agree that the canon of contract interpretation set forth in
Section 1654 of the California Civil Code shall not be applied in the construction or
application of this Agreement.
17. This Agreement and other documents executed in order to
implement the provisions of this Agreement shall be governed by and construed in
accordance with the laws of the State of California.
18. This Agreement, the Stipulation of Dismissal, and the documents
referred to in paragraph 12 hereof, represent the entire agreement of the parties and is
made without reliance upon any statement or representation not contained herein, the
making of any such statements or representations being specifically denied.
19. THE UNDERSIGNED HEREBY CERTIFY THEY HAVE READ ALL
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OF THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASES AND FULLY
UNDERSTAND ALL OF THE SAME.
By:
CITY OF LA QUINTA
By:(/-/-�
LA QUINTA REDEVELOPMENT AGENCY
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REFCO, INC.
REFCO SECURITIES, INC.
REFCO CAPITAL CORPORATION
REFCO GROUP, LTD.
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RESOLUTION NO. 98-81
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LA QUINTA, CALIFORNIA AUTHORIZING SETTLEMENT
AUTHORITY TO THE CITY MANAGER FOR THE CASE LA
QUINTA ET AL VERSUS REVCO CASE NO. CV92-7626RJK
WHEREAS, the City Council of the City of La Quinta, California and Revco
are interested in negotiating a settlement to the case La Quinta at al v. Revco Case No.
CV92-7626RJK; and
WHEREAS, it is determined by the Council to be in the best interest of
the City to expedite the approval of a settlement within the authorization amount given
to the City Manager without the necessity of returning to the Council.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LA QUINTA
DOES HEREBY RESOLVE AS FOLLOWS:
1. The City Manager Thomas P. Genovese is authorized to
execute on behalf of the City a settlement agreement
between Revco and the City of La Quinta for Case No.
CV92-7626RJK within a preauthorized amount and
approved as to form by special litigation counsel and the
City Attorney.
The foregoing Resolution was approved and adopted at a meeting of the
City Council held on this 201" day of July, 1998 by the following vote:
AYES: Council Members Adolph, Henderson, Perkins, Sniff, Mayor Pena
NOES: None
ABSENT: None
ABSTAIN: None
JOHN . PENA, M yor
City of La Quinta, California
c
Resolution No. 98--81
Adopted: 7120198
Page 2
ATTEST:
AUNDRA L. JOHOLA, City Clerk
City of La Quinta, California
APPROVED AS TO FORM:
DAWN C. HONEYWELL, City Attorney
City -of La Quinta, California
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ► ss.
CITY OF LA QUINTA )
1, SAUNDRA L. JUHOLA, CITY CLERK OF THE CITY OF LA QUINTA, CALIFORNIA,
DO HEREBY CERTIFY THAT THE FOREGOING RESOLUTION NO. 98-81 WAS
ADOPTED BY THE LA QUINTA CITY COUNCIL IN A REGULAR MEETING HELD ON
JULY 20, 1998 AND HAS NOT BEEN AMENDED OR REPEALED.
Dated: August 6, 1998
'SAUNDRA L. JUHOLA, City Clerk
City of La Quinta, California
RESOLUTION NO. RA 98-05
A RESOLUTION OF THE REDEVELOPMENT AGENCY
BOARD OF THE CITY OF LA QUINTA, CALIFORNIA
AUTHORIZING SETTLEMENT AUTHORITY TO THE
EXECUTIVE DIRECTOR FOR THE CASE LA QUINTA
REDEVELOPMENT AGENCY ET AL VERSUS REVCO CASE
NO. CV92-7626RJK
WHEREAS, the Redevelopment Agency of the City of La Quinta, California
and Revco are interested in negotiating a settlement to the case La Quinta et al v.
Revco Case No. CV92-7626RJK; and
WHEREAS, it is determined by the Board to be in the best interest of the
Redevelopment Agency to expedite the approval of a settlement within the
authorization amount given to the Executive Director without the necessity of returning
to the Board.
NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF
LA QUINTA DOES HEREBY RESOLVE AS FOLLOWS:
1. The Executive Director Thomas P. Genovese is authorized
to execute on behalf of the Redevelopment Agency a
settlement agreement between Revco and the City of La
Quinta Redevelopment Agency for Case No. CV92-
7626RJK within a preauthorized amount and approved as
to form by special litigation counsel and the Agency
Attorney.
The foregoing Resolution was approved and adopted at a meeting of the
Redevelopment Agency held on this 20"' day of July, 1998 by the following vote:
AYES: Members Adolph, Henderson, Pena, Sniff, Chairman Perkins
NOES: None
ABSENT: None
ABSTAIN: None
Resolution No. RA 98-05
Adopted: 7/20/98
Page 2
RON PERKINS, Chairman
La Quinta Redevelopment Agency
ATTEST:
l_SAUNDRA L. JUHOL , Secretary
La Quinta Redevelopment Agency
APPROVED AS TO FORM:
Z�' .. ,rt,"o-P 0
DAWN C. HONEYWELL, Attorney
La Quinta Redevelopment Agency
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78-495 CALLE TAMPICO - LA QUINTA, CALIFORNIA 92253 - (760) 777-7000
FAX (760) 777-7101
TDD (760) 777-1227
August 6, 1998
John F. Cannon
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive Suite 1600
Newport Beach, California 92660-6441
Dear John:
Enclosed are is a signed copy of the settlement agreement in the Refco case along
with certified copies of the resolutions authorizing execution of said agreements.
If I can be of further assistance, please give me a call.
Since}ely,
SAUNDRA L. JUHOLA, City Clerk
City of La Quinta, California
,
MAILING ADDRESS - P.O. BOX 1504 - LA QUINTA, CALIFORNIA 92253 Im