Wednesday, June 24, 2015

Court says there is no "two-year" limit on Madison County paying Parkway East bonds.

U.S. District Judge Carleton Reeves denied in April motions for summary judgment filed by Radian Asset Assurance Company and Madison County.  Radian insured $27.7 million in bonds sold by the Parkway East Public Improvement District. The district defaulted on the bonds, but Madison County paid $2.033 million to bondholders for the scheduled payments for two years.  Radian sued Madison County for reimbursement of the payments it made to bondholders after the county stopped making payments.  Madison County claimed it only had to pay the bondholders for two years per a 2005 contribution agreement made between the district and Board of Supervisors.   However, Judge Reeves disagreed with the county and ruled there was no limit of two years on the county's liability to the bondholders if the district defaulted on the payments.   Judge Reeves stated:

When the District failed, Madison County made the District’s bond payments between October 2011 and September 2013. The County then stopped, arguing that the contribution agreement required it to cover bond payments for only two years. As Madison County reads the agreement, it is now Radian’s duty as insurer to step forward and repay the bonds.

However, Radian acted as a typical insurer and looked for any language possible to shift the burden of payment to Madison County:

 Radian disagrees. It filed this suit seeking, among other things, a declaration that Madison County remains responsible for bond payments...
Judge Reeves delves into the issue of the two-year limit (page 7) and does not find favor for Madison County:

The County argues that its duty to cover the District’s bond payments lasts only two years. It derives this length of time from the third part of the contribution agreement, as presented and segmented above.

The two-year limit, however, refers to the amount of time the District has to reimburse the County. It does not apply to the County’s obligation to make bond payments. The first part of the agreement contains no time limit on the County’s obligation to make bond payments...

The language of the agreement suggests that the District’s insolvency cannot be a reason for the County to be dissatisfied. The County’s duty to make bond payments is, in fact, triggered by the District’s inability to pay. If the District’s insolvency entitled the County to be dissatisfied, the County’s agreement to make missed bond payments would have no meaning; it would never be reached.

It also would be unusual for a time limit in part three of the agreement to apply by implication to part one, given, among other reasons, the fact that part three opens with the words, “[n]otwithstanding the above.” When this bond deal was being put together, the parties were represented by capable counsel. Nothing precluded the County from seeking to limit, in the first part, any advanced payments for a period of two years. Undoubtedly, there would have been resistance from the other side. But such a limitation is not present.  The amount of time the District has to reimburse the County is independent of the duration of the County’s duty to make bond payments.

Thus Judge Reeves disposes with the two-year limit argument made by Madison County and recognizes the arguments made by each side regarding actual liability for bond payments.  The contribution agreement states:

Notwithstanding the above, Parkway East hereby convenants and agrees to provide full reimbursement of the County, no later than two years from the date thee deficient debt service payment is made, for the amounts the county provides to the paying agent and/or the bond trustee, pursuant to this Section 3...
The county posits that the agreement states the bonds are not backed by the "full faith and credit of the county".  Radian agrees with that position but states it must make payments "as long as it has sufficient unrestricted funds in its general fund."  However, Judge Reeves said it was not "necessary" to resolve that issue at this time.  Judge Reeves states that the main point of his opinion is

It is enough at this juncture simply to say that the contribution agreement does not state how long Madison County agreed to cover the District’s bond shortfall. The County agreed to make the District’s bond payments for some period of time, but whether the parties contemplated payments of one year, two years, five years, or something else is not contained within the four corners of the contract and cannot be inferred by the Court. Additional proceedings are necessary to answer that question, whether in the form of a trial (given the fact dispute suggested by the briefing, but not before the Court today) or additional motion practice.
Judge Reeves scheduled a status conference later this month.  It appears Madison County will not have the protection of a two-year time limit on paying the bondholders but the court may still impose a time limit on the contribution agreement- after more litigation.  Score a round for Radian.

Note: Madison County made the following bond payments per what it argued were the terms of the contribution agreement:

October 24, 2011: $374,021
April 25, 2012: $464,376
October 24, 2012: $518,401
April 16, 2013: $676,514
Total: $2,033,313

Kingfish note: That was the news, now for the opinion.  The county has repeatedly said taxpayers were protected and that it would only have to make payments for two years.  Payments for bonds sold to support a project dreamed up by Montgomery, Ambrosino, and Sethi.  Montgomery drew up this agreement and knew very well what he was doing.  Judge Reeves makes it clear there is no two-year limit on the payments and the county could be on the hook for the payments for much longer than it repeatedly claimed in public and in court. 


Anonymous said...

Judge Reeves sure has some interesting cases.

Anonymous said...

KF, Bob Montgomery initially represented the Madison BOS when that project started in 2003, but when the new BOS took office in 2004, he was fired. Ed Brunini took over. The District Attorney investigated the project and found that the former BOS had spent about $800,000 on the project with no formal Public Improvement District having ever been formed. The PID had no minutes, no bank account, no physical address. Brunini did all the work formally creating the district and probably drafted the document at issue.

Anonymous said...

Why would the county believe it was only 2 years if not true?

Anonymous said...

Deals such as this are just wrong. Heads should roll and a lot of them.

toejangle said...

Exactly the results expected when you have an uneducated bunch of redneck boobs as supervisors---Time to replace them all and elect some people with integrity! We are probably on the hook for the "park in nowhere" payments as well not to mention the 1.2 million dollar airport study.

Anonymous said...

Maybe the BOS should look at charging a fee to the trucking companies who are using the parkway to train new drivers. They could then apply that revenue to help offset the screwing over of the taxpayers.

Anonymous said...

This was the correct legal result. And yes it sucks.

Anonymous said...

Toejangle, you need to keep up better, looks like it may cost us a lot more than just the cost of the study.

Anonymous said...

Toejangle, we've tried that repeatedly. The voters in our county could not elect competent officials if their lives depended on it.

New officials will only mean here comes another one, just like the other one. Why? Because competent people will not run in Madison County, and the few who do cannot get elected by our "intelligent" electorate. And yes, I'm referring to the folks in the south part of the county, too, who are so easily fooled.

Hate to sound so jaded, but I've watched this phenomenon for 30 years in Madison County.

Anonymous said...

Now is the time for a change , totally. The election is a couple of months away and some good folks to vote for.

Anonymous said...

Do any of the supervisor challengers actually have a chance? They have signs out but I'm not hearing much chatter. My hunch is they all win re-election.

Anonymous said...

Ok lets get the facts right on this issue. Mary Hawkins Butler supported Andy Taggart, Doug Jones and Elvis for election back in 2003. They were all elected. They FIRED all of the county employees. They HIRED Brunini Law firm and agreed to pay them 2x what the previous board attorney was charging. They also took control of the Parkway East Project and had Brunini draft the Contribution Agreement that created this problem. Taggart "being a lawyer" worked very close with Brunini to make sure the agreement that the board approved "Protected" the tax payers of Madison County...... This is the very agreement outlined in in this blog post. Karl Banks and Paul Griffin were also on the board when this was done, but had zero input into the process. White boys (Doug, Andy & Elvis) were in charge. THE MAYOR OF MADISON MARY HAWKINS BUTLER WAS IN SUPPORT AND PUSHED HARD FOR THIS PROJECT. ANDY, DOUG AND ELVIS CARRIED OUT HER WISHES IN 2004 THAT LANDED MADISON COUNTY WHERE WE ARE NOW........

Anonymous said...

1:15 PM

Hits nail on head.

Now its time to just clean this up. That will come through development of the property..which will take time.

There are lots of projects in the works which will help ease this burden.

Rumblings of Change said...

It's irresponsible to suggest that none of the competition has a chance of winning. And it's disengenuous to suggest that because "I've watched it for 40 years", it will necessarily repeat itself again. We're hopefully better informed voters now. Sure, there are those who will allow an incumbent to stick up his sign simply because he's the incumbent; but, hopefully there are thousands more who read, visit internet sites (like this one) and listen.

No, Mary did not support Doug Jones in '03. At that point in time, she supported Crosby (or whenever he first ran), but that was before she didn't support him later. She later realized he was pretty much maxed out at cleaning up pickle spills on aisle nine.

The gentlemen of color won't have any problem getting reelected. That's a given. But the rest....YEP. Chances ARE.....

Rumblings of Change said...

It's irresponsible to suggest that none of the competition has a chance of winning. And it's disengenuous to suggest that because "I've watched it for 40 years", it will necessarily repeat itself again. We're hopefully better informed voters now. Sure, there are those who will allow an incumbent to stick up his sign simply because he's the incumbent; but, hopefully there are thousands more who read, visit internet sites (like this one) and listen.

No, Mary did not support Doug Jones in '03. At that point in time, she supported Crosby (or whenever he first ran), but that was before she didn't support him later. She later realized he was pretty much maxed out at cleaning up pickle spills on aisle nine.

The gentlemen of color won't have any problem getting reelected. That's a given. But the rest....YEP. Chances ARE.....

Anonymous said...

I'm loving how green Sheila Jones is. She thinks that by calling for the existing BOS and telling people that they are crooks (Straight from Mary Hawkins Play Book) that she can get elected. Lets consider for a minute that she does get elected. How much can she do for the citizens of District I if she can't even get a second on any motions she makes to have work done in Dist. 1. You may or not like John Bell but he has learned that in order to help his constituents that he has to get along with his peers. Sheila will not be able to get along and the result will be unproductive for Dist 1. Wake up Mrs. Jones......

Anonymous said...

I'm willing to give anybody a chance to serve as Supervisor in any district in Madison County, things will never get better unless you break up the bunch we have now.

Samuel Clemens said...

"If voting made any difference they wouldn't let us do it."--Mark Twain

Anonymous said...

To 5:11 pm----"Wake up Mrs. Jones" I think Mrs. Jones is awake and will get along fine with her peers----She most certainly will not get along with Rudy and those who waste taxpayer dollars. Mrs. Jones is honest and that's good enough for me..

Crimewatch 101 said...

@ 5:11 (Is that you John Bell?) I think what you just said is this: Leave the crooks in office since they are the only ones who will second each others' motions. How farkin' nuts is that. Miz Jones' first obligation is to take a seat and start about the business of ending corruption. She won't be scraping out front yard ditches with a back hoe in exchange for a vote.

'Green', as you put it, is probably what we need. A fresh, clean, green start. The lady is an attorney. She's a nurse. She's a Sunday School Teacher. And she's a master-gardener which gives her more knowledge of drainage and erosion than John Howland learned serving for fifteen years as a stay at home mom.

Time to clean house. If not all at once, then, dammit, one at a time. Stack 'em like cordwood and let them find jobs for a living. This county needs change, not airport studies, roads to nowhere, parks where there are no people and shell-games.

Anonymous said...

Just to add some thoughts:
1. I've known Sheila for a long time, and I am pretty sure she'll be able to get along with everybody, including Rudy. BUT, she will hold them accountable;
2. Mary did support Doug Jones, in 2003, but had a falling out with her when he wouldn't vote her way on a road funding project;
3. John Bell first got elected in 2007, defeating Doug Jones, because he agreed to vote for rezoning the Lake Caroline golf course for more and smaller houses, his cronies (Tim Johnson and Steve Vassalo) promised that the Ashton Park wall would be built if he was elected, and the mother of every school kid who ever tried to sell something in front of Kroger in Madison voted for him. I can't tell that he's ever done anything since he's held office; and
4. If you'll look back at the campaign finance reports from the last two elections, you'll see that JBC accepted campaign contributions from Dick Ambrosino and S.L. Sethi, owners of Parkway South/Galleria Parkway. Ambrosino even hosted a fund raiser at his house. It really bothers me that JBC even accepted the contributions from them when the county is making their bond payments for them (as JJ previously reported). A major conflict of interest, in my opinion.

Saint Valentine said...

Mary supported JBC in his virgin campaign and, for the most part, got him elected. Then Crosby met the devil and got corrupted. Mary saw the light and put him in the jettison tube in the Madison submarine.

Vasallo, whose wife was in tight with the mayor at city hall and ran the Chamber, was JBC's campaign finance manager. He knew where the bodies were buried and who bought who and saw the money-flow during the campaign, both on the books and off. Vasallo saw the light and repented and became JBC's worst nightmare even after Vasallo moved out west. JBC continued to remain teflon like he had good sense.

The whole county scene has become a circle-jerk and everybody knows who the jerks in the circle are. JBC spoke (conspired) with Sethi and others to build the road from 463 up through Gluckstadt, running parallel with I-55. The land was and is a swamp. Sethi made land purchases and Crosby (and the boys) bought the rights from those guys to build the road. It's the same with the park where nobody lives and the imaginary airport nobody needs.

It remains a mystery as to how a stock boy and a pissant engineer can manage to manipulate every tax dollar that goes in the county coffers. The remaining question is this: Who will be first to show up - John Grisham, Pickering or a Hollywood Producer. Where is Elliott Ness when we need him.

Anonymous said...

Pickering already had his shot and managed to gin up even more money for his buddy Warnock. Why do you think Mary's been so mad at him for all this time?

Anonymous said...

Great post, 3:54! I think the Coen Brothers need to do the movie about this place. Pissant crooks getting their just deserts, is a recurring theme in Coen films. Think of Madison County as FARGO with Alligators.

But maybe the Coens should wait until Neal & Anna sell their Jackson chicken ranch, move to Bridgewater, and get whatever comeuppance Karma has in store for them. Goodness! The body count in Bridgewater is high enough, already! Come back to us, PRECIOUS!

Considering that one Madison County bad guy has already killed himself in a gruesome way (Antifreeze, if I'm remembering correctly), I'm thinking that Karma is especially bitchy, out here in Strawberry Patch Land. Maybe Karma is allergic to Strawberries.

Fargo had the sweet Police Chief, who was way smarter than she at first appeared to be. Madison has sweet Mayor Mary, who turns out to be smarter than the bad guys, too. To have some sort of time element, and things building to a climax, I'd have the big scene happen at the grand gala opening of THE LAKE THAT LEAKS. Dressed-up dignitaries, marching bands, and some sort of crisis! That formula always works for Piranha movies. Maybe, in the same way that the "Engineers" somehow missed the vast deposits of sand beneath the lake, they could, in the movie, fail to notice the numerous nearby Alligators, which would invade the grand gala opening, and gobble-up the corrupt.

Anonymous said...

You people are absolute nut cases.

First things first. Go see an MD and get some medicine for that paranoia. Rudy was audited by Pickering. Rudy under bid. - That is a fact.

John Bell Crosby worked with the board to save many projects and is to be commended for his work.

Jill Ford is Mary's puppet. Mary cannot stand to have no control and her ire cannot be quenched. She has been paid to run against Pickering by people who stand to lose millions if Pickering has his way.

You talk about corrupt? Mary Hawkins is the most corrupt person in office today. She manipulates people, bullies people, and her day is coming....soon.

Blind Hogs and Corruption said...

6:50; Even if you were correct (but you're deluded), paranoia, manipulation and bullying are the definition of corrupt. If you had access to the State Auditor's library of activities over the past fifty years (all of them), you'd know that many officials who went to jail had earlier 'passed' several audits. It takes awhile, and a competent Auditor, to ferret out corruption and prosecute it.

"John Bell worked with the board to save many projects...." What are they? Even a corrupt politician will occasionally do some good just as a blind hog might eventually find an acorn.

And your goffiest remark of all is that Rudy is the low bidder. Holy Shat Batman! Throw a net around that poster.

Anonymous said...

I'll add to what 8:47 said to 6:50. Get your head out of the sand (or wherever), for Pete's sake!! The issue with Rudy was that there were no bids - the BOS hired him without any bidding, proposals,etc. As for Jill Ford being Mary's puppet, she could look to JBC as a role model there. I learned early on that the way to get him to respond to the few emails I sent him was to copy Mary. Every time, about a week passed and then I'd get a call from the mayor's office asking if I'd heard back from him. Within an hour or two, he'd call and give some lame answer to my question/issue. I, too, would like to know about all the projects he "saved". They sure aren't any on his campaign literature - wonder why? As to the "audit"(I'd argue the use of that term), in what they did they could only take the information Rudy's bunch provided, and guess what he gave them? Right, garbage in, garbage out.

Anonymous said...

6:50: obviously u are being paid by Rudy like Pickering is. Are u scared of losing your cash cow too? Without the BOS, Rudy wouldn't be able to drive his Bentley and live in his mansion. Have you seen all the money he's throwing at this supervisor race? He's scared to death of losing control. He should be, Baxter is going to beat his guy, Howland. A stay at home dad, really? That's what we need? And JBC, A Kroger clerk?Jill Ford, Sheila Jones and trey Baxter have a real chance of taking over.

Patton Ford said...

First of all, my name is Patton Ford. Second of all, the Anonymous person that claims that my mother, Jill Ford, is someone's puppet obviously needs a dose of the medicine they are trying to peddle. Furthermore, anyone that knows Madison County knows that what's happening in Canton is a bunch of garbage. It doesn't take an engineer to study that mess.

One thing you should know is that before my mother qualified, she did her due diligence. She met with the key players in Madison County politics, looked them in the eye, and shook their hand. Was the mayor of the county's largest city one of them? Yes. Was the county engineer one of them? Absolutely. Were former and current supervisors part of the list? Well, of course. Why would she get into this race without meeting her teammates/opposition. She is the smartest woman I know.

Finally, why would my mother testify against her own father ultimately sending him to prison if she was puppet material. If her own daddy didn't have strings on her, I can guarantee you Mary Hawkins-Butler ain't Jill Ford's puppeteer. Let's stick to the facts, Mr. (insert real name here).

Anonymous said...


You really shouldn't come to a blog and defend your momma. Or give info about who she met with... have a feeling she doesn't know yet.

Patton Ford said...


Thanks for the advice. Noted.

Sheila Gets Our Votes said...

She doesn't yet know who she met with? Interesting.

Sheila For District 1 Supervisor

Anonymous said...

As a resident off Ridgeland, I would like to ask both Mrs. Ford and Mr. Steen, or their spokespersons, two questions:

1. Name three issues where you differ from Mayor Hawkins-Butler.

2. Name three issues where you differ from Mayor McGee.

3. What is your initial method of resolving conflict between yourself and other elected officials, both on the Board of Supervisors and in municipal office?

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