“Based upon the prospect for evidence to be presented at trial,” the statement read, “the Board of Supervisors has elected to accept an offer in compromise proposed by Davenport & Co., LLC whereby all claims by both parties in the pending case will be dismissed with prejudice with both parties bearing their own respective costs of litigation and attorneys’ fees.”
The statement noted that the lawsuit against Davenport was initiated by a prior Board of Supervisors in 2011. “The current Board has re-evaluated the merits of the case, including recent information about the value of the refinancing of the high school debt which has since occurred, and concluded that the financing votes by the Board and advice from Davenport concerning the bond issuance in 2008 have not proven to be unreasonable or cause the County financial harm,” according to the statement. “Therefore the Board does not see the value in continuing to pursue the prior Board’s suit, and is voluntarily dismissing the litigation. The Board further acknowledges that certain statements were made in the lawsuit against Davenport, and Mr. David Rose in particular, which were not accurate, and the Board regrets this mistake.”
Davenport CEO and President Lee Chapman also issued a statement. “We are certainly glad to see an end to this lawsuit, and to have the public statement by the Board in connection with its voluntary dismissal. Davenport has always stood by the advice its advisors gave the County, and the integrity of that advice has proven itself over time. This case had no legitimate basis and strong political overtones from the outset. We only regret that it took three years of litigation for the Board to reach the conclusion that it was without merit.”
The lawsuit, which has cost the county more than $500,000 in attorneys’ fees and $90,000 in money paid to two expert witnesses, originally alleged that the county had suffered $18 million in damages in the form of excess interest it would pay over the life of the bonds purchased to fund the construction of the new high school. The amount of damages was later dropped to $5 million after part of the bonds were refinanced. A financial analyst hired by the county as an expert witness had asserted in her deposition that the amount of excess interest was closer to $1.5 million; when she was informed that there would have been certain fees involved that she had not taken into consideration in her calculations, she conceded that the amount of damages would be lower than that.
The county had failed to produce evidence in the case – emails from the account of former County Administrator Cabell Lawton – by a deadline set by the court, claiming the emails were lost. Although the deadline was missed, the county later found the emails. At the time of the offer made by Davenport, the emails still had not been sent to Davenport’s attorneys.
County Administrator Steve Nichols, County Attorney Fred Payne, and Board of Supervisors member Tony O’Brien declined to comment. The remainder of the board could not be reached for comment.
