Maverick County settles federal lawsuit with UMB Bank as Trustee of Maverick County Detention Center Bondholders
By: Ricardo E. Calderon, Eagle Pass Business Journal, Inc., Copyright 2017
Maverick County Commissioners Court unanimously approved to settle the pending federal lawsuit filed by UMB Bank as Trustee of the Maverick County Detention Center Bondholders at their special meeting held on Friday, February 17, 2017.
UMB Bank filed a lawsuit against Maverick County and the Maverick County Public Facility Corporation in U.S. District Court for the Western District of Texas, Del Rio Division, in Del Rio, Texas on August 3, 2015, alleging that the Maverick County Public Facility Corporation had leased the Maverick County Detention Center to Maverick County to detain federal prisoners on behalf of the U.S. Marshal’s Service and that Maverick County had withheld and used $1,019,939.67 for operating expenses before paying the Bondholders ($42.2 Million) through its trustee, UMB Bank. Maverick County and Maverick County Public Facility Corporation held certain legal options such as the right to lease or purchase the 625 Bed detention center from the Bondholders.
Upon returning from Executive Session after consulting with Maverick County Legal Counsel Robert “Woody” Wilson, Maverick County Commissioner Precinct 1 Jerry Morales made a motion to authorize Legal Counsel Wilson to accept on behalf of Maverick County the settlement offer of $500,000 payable to Maverick County by the Bondholders in exchange for the County’s release of all of its claims in the detention center and federal lawsuit. Commissioner Precinct 3 Pete Venegas seconded the motion. After minimal discussion, Commissioners Court approved Morales’ motion to accept the settlement offer.
As a result of accepting the settlement offer, both Maverick County and the Maverick County Public Facility Corporation waived and released all of their legal claims that they may have had against the Bondholders concerning the Maverick County Detention Center while closing out in the immediate future the pending federal lawsuit filed by UMB Bank as Trustee of the Bondholders.
County Judge David R. Saucedo noted that the settlement agreement will bring in much needed $500,000 into Maverick County’s General Fund as well as revert the Maverick County Detention Center to the tax rolls, which should bring in approximately $190,000 per year in ad valorem property taxes to Maverick County and an even larger amount of taxes to the Eagle Pass Independent School District in 2017 and future years.
Legal Counsel Wilson told the Eagle Pass Business Journal that the parties were going to draft the settlement agreement and legal documents necessary to dismiss the federal lawsuit in the immediate future to consummate the parties’ settlement of all of their claims against each other.
Most importantly, Maverick County will not pay any monies to the Bondholders while receiving $500,000 in settlement funds from the Bondholders that will go to the County’s coffer.
Immediately after the Maverick County Commissioners Court special meeting adjourned, a special meeting of the Maverick County Public Facility Corporation was called to similarly accept the Bondholders’ $500,000 settlement offer to the Maverick County Public Facility Corporation and Maverick County, which its Board of Directors unanimously approved too. After approving the settlement offer, the Maverick County Public Facility Corporation Board of Directors approved to adjourn their meeting.
The acceptance of the Bondholders settlement offer brings closure of the protracted and expensive federal lawsuit to Maverick County taxpayers while recuperating the sum of $500,000 for Maverick County’s General Fund. As of press time, it is unknown how much money Maverick County had to spend in reasonable attorney’s fees, court costs, and expenses in defending and prosecuting this lawsuit.
