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City appealing River Park Square ruling

FRIDAY, FEB. 17, 2006

The city of Spokane will appeal a ruling that kept it from collecting money from one of the participants in the River Park Square parking garage project.

Mayor Dennis Hession said Thursday the city will ask the 9th U.S. Circuit Court of Appeals for the right to seek damages from Prudential Securities, the underwriter of some $31.5 million in bonds that were backed by garage revenues. It is appealing a final ruling last month by U.S. District Judge Edward Shea on the city’s claims against Prudential.

“They were a significant defendant in this case. They represented the bondholders,” Hession said. “We expect them to be paying their fair share of the costs to settle the case.”

Prudential was one of only two former defendants in a massive federal lawsuit that refused to settle the case after the city repurchased the garage bonds. Last spring, Shea ruled that settlements from the other defendants covered the amount the city was entitled to seek for securities fraud claims covered in the lawsuit and dismissed Prudential from the case.

The city disputed the ruling, and Prudential filed a counterclaim. Shea dismissed both Jan. 18, and the city had a month to appeal.

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