Orange County Civil Case Transferred

A $400-million civil lawsuit stemming from the huge Orange County bankruptcy has been transferred to Ventura County after a judge ruled that a neutral venue was needed to try the case.

But Ventura County officials said Thursday that they are uncertain whether the case belongs in this jurisdiction, and they may try to bounce it back to Orange County if the proper procedures have not been followed.

“We have received the order of the Orange County judge,” said Ventura County Superior Court Judge William Peck, who supervises the civil caseload.

Change-of-venue requests are typically handled by the Judicial Council of California in San Francisco, Peck said. He was unsure whether the Orange County case was referred through that agency.

A judicial council spokeswoman said Wednesday that her office has not received such a request.

The lawsuit, filed by the city of Orange and two public agencies that lost millions in a risky investment pool, blames former outside county auditor KPMG Peat Marwick for failing to warn them of the impending financial crisis.

The Orange County Water District, the Orange County Transportation Authority and the city of Orange filed separate lawsuits against KPMG in September and November 1996.

The three cases were consolidated into a single legal action and transferred to Ventura County Superior Court last month. An initial hearing is set for Feb. 6.

The legal action was among a slew of multimillion-dollar lawsuits filed against several Wall Street brokerages and other professional firms in the wake of Orange County’s bankruptcy filing.

The most significant case is now pending in U.S. District Court against brokerage giant Merrill Lynch & Co. and KPMG.

Orange County filed the nation’s largest-ever municipal bankruptcy case in December 1994, when its $7.6-billion investment pool faced nearly $2 billion in losses.