STATA bankruptcy settlements reached |

STATA bankruptcy settlements reached

Tom Lotshaw

More than three years of litigation between MV Transportation and the defunct South Tahoe Area Transit Authority and its board of directors and members appears to be wrapping up.

A string of good-faith settlements between MV Transportation, STATA and the 11 public and private entities that once funded STATA have been approved over the last several months.

The Fairfield, Calif.-based transportation company entered a contract to operate, manage and maintain the BlueGo transit system for STATA in 2009.

It sued STATA, its board of directors and its members for breach of contract, unpaid services and damages as STATA ran out of money and entered Chapter 11 bankruptcy in 2010. Litigation has been ongoing ever since, with numerous cross-complaints and settlements approved piecemeal in federal bankruptcy court in Reno.

“MV (Transportation) is delighted that the matter has been concluded with amicable settlements among all the parties,” said Kaaran E. Thomas, a Reno attorney who has represented the company.

MV Transportation sought more than $5.6 million in damages, according to Thomas and court records.

That total included compensation for $1.9 million in unpaid invoices, $394,930 in interest, an $825,000 promissory note, $1.2 million in lost profits and $869,771 in attorneys’ fees, according to court records.

The company is estimated to have recovered about $2.38 million.

According to court records, the company has received about $908,000 from settling defendants. The last settlements were approved in early December, Thomas said.

That list includes the STATA board and its insurance company, El Dorado and Douglas counties, Tahoe Transportation District, Tahoe Regional Planning Agency, the city of South Lake Tahoe, Ridge Tahoe Property Owners’ Association and the parent companies of Heavenly Valley, Harveys Lake Tahoe, Horizon Casino, MontBleu Resort Casino & Spa and Lakeside Inn and Casino.

In the good-faith settlement agreements, the defendants deny liability and say they are settling to “buy their peace” and control litigation expenses.

MV Transportation is also estimated to receive about $1.475 million from a liquidating agent assigned by the bankruptcy court to pursue and liquidate STATA’s assets to satisfy its creditors.

The final settlement figures are unknown. The liquidating agent will pay his expenses and all of STATA’s other small creditors, all of who are being paid in full, and any money left over will go to MV Transportation, Thomas said.

That’s expected to include at least some amount of grant money the California Department of Transportation awarded to operate BlueGo.

“Those grant moneys are being collected, and when collected will be distributed to MV as well,” Thomas said.

A lawyer at the law firm representing STATA could not be reached for comment on the case.

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