Irish bank seizes money from Wisconsin schools

Five Wisconsin school districts must now decide if they will set aside money to begin repaying a $165 million loan to an Irish bank that says they are in default and has seized $5.6 million.
The five districts – Kenosha, Kimberly, Waukesha, West Allis-West Milwaukee and Whitefish Bay – borrowed the money from Dublin-based DEPFA and combined it with $35 million of their own money as part of a plan to invest the funds and pay for retiree benefits. But those investments soured, and now less than one-tenth of the original money remains.
The districts have sued the investment bank Stifel, Nicolaus & Co. Inc. and the Royal Bank of Canada, alleging they were misled into making risky investments. Stifel filed a countersuit earlier this month.
The districts’ attorney, C.J. Krawczyk, said the schools expected DEPFA to seize the money, which he said represents the earnings on the original investment over the past 3.5 years. He said the move now triggers a process in which each of the districts will put a question before their school boards on whether to set aside money to repay the original loan. He said he could not predict what the boards would do.
Wisconsin-based lobbyist Bill Broydrick, who represents DEPFA, said the bank continues to expect the districts to repay the full loan, even though they have shown no signs of doing so.
– WisPolitics.com