SAN BERNARDINO – An attorney’s move to collect $1.4million the city had agreed to pay to the families of three men killed by police prompted an early bankruptcy filing to avoid paying the settlements, officials said Thursday.
“He was moving to execute, and had the judge taken action the city wouldn’t have been able to make its next payroll,” said City Attorney James F. Penman. “Bankruptcy protection prevents him from seizing our assets.”
In addition to three cases alleging excessive force, which Penman declined to elaborate on, he said another creditor had begun trying to seize machinery from the city last week.
Woodland Hills-based attorney Dale Galipo said he tried to get the judge to force payment or prioritize settlement payments in the three police cases – which the city, plaintiffs and judge had agreed to at various points over the past year – because he wanted to make sure his clients were paid.
“In our judicial system, we operate in good faith,” Galipo said. “I’m very disappointed, and I’m very concerned for my clients, and I’m trying to do everything to make sure they get what was agreed to.”
Galipo said the city agreed to pay the families of Cedric May, Jerriel Da’Shawn Allen and Terry Wayne Nash $525,000, $575,000 and $686,000 respectively.
The city already paid $325,000 in the May case, he said.
A closer look at the three cases follows:
Police shot May in 2009, and reported at the time that May grabbed an officer’s genitals and Taser while fighting with police.
The shooting happened the night May’s family had a barbecue to celebrate his release from jail the previous day. Family members said at the time that contrary to police statements, he was shot after being handcuffed.
Allen was 19 when he was shot by officers after a chase in which a vehicle crashed through three backyard fences.
He was a passenger in a Chevrolet Tahoe that reportedly ran a stop sign, then kicked up dust, making it difficult for officers to see.
Officers say they had heard someone yell “shoot ’em, shoot ’em,” and saw Allen look at officers with his hands hidden.
Allen was later determined to be unarmed and reaching for his marijuana.
Nash, also known as Terry Jackson, died in police custody in 2011 after a Taser was repeatedly used on him.
Officers said Nash, a 250-pound 22-year-old who reportedly had paranoid schizophrenia and was under the influence of methamphetamine and marijuana, continued struggling even while they were waiting for an ambulance.
A federal jury in Los Angeles determined police were unnecessarily rough and improperly denied medical aid on the scene.
The city’s delay of payments may backfire, Galipo said.
“This bankruptcy may not last forever, and two or three years from now, I may be asking a jury for 3 or 4 million dollars,” he said. “(City officials) may say they should have been more reasonable now.”
But the decision to file an emergency bankruptcy petition may help City Hall if any creditors challenge San Bernardino’s eligibility for bankruptcy protection, said attorney Michael Sweet of the San Francisco offices of Fox Rothschild.
Sweet, who advised officials in the Bay Area city of Richmond on a plan to avert a bankruptcy filing, said bankruptcy law makes it easier for debtors to file a case without going through a mediation process with their creditors if the debtor could lose money in a court judgement.
San Bernardino’s situation is particularly interesting, Sweet said, because he views the case as combining aspects of the Orange County and Vallejo bankruptcies.
Orange County went bankrupt in 1994 after the failure of the county’s investment policies. Its treasurer at the time, Robert Citron, ended up pleading guilty to multiple criminal charges.
Vallejo, the first California city to declare and emerge from bankruptcy, took the action because its revenues fell far short of its financial commitments, Sweet said.
Allegations that San Bernardino’s financial records have been falsified for 13 of the past 16 years complicate things, Sweet said.
“Here you’ve got both things, which make for an extraordinary mess,” Sweet said.
Penman said he did not expect any difficulties as a result of the early bankruptcy filing, although it would have been more efficient to file all paperwork at once.
“I don’t think there’s any substantive difference,” he said, “other than we were hoping to use the next two weeks to gather more information and file more documentation with the initial filing pages.”
Those documents should still be filed by the middle of the month, Penman said.
The city’s employees are among the creditors who may choose to challenge City Hall in U.S. Bankruptcy Court.
Any decisions to contest the city’s claims, however, will not be made until San Bernardino officials show more information on the city’s financial condition. The initial filing contained only minimal information, such as the city having more than $1billion worth of assets and liabilities.
“There are some questions about what their actual numbers are, and we need to see the numbers that are filed under penalty of perjury,” said Corey Glave, the attorney who represents San Bernardino Professional Firefighters.
The San Bernardino Police Officers Association’s attorney, Dieter Dammeier, does not anticipate any challenges to the bankruptcy itself but will be keeping guard to make sure the city doesn’t impose any changes to officers’ labor contract without a judicial order.
“If the city deviates from the status quo, we probably would challenge that,” he said.
Other city employees haven’t seen any changes to their working conditions now that the filing is official, but labor representative George Swift said he’s contemplating a meeting with the city manager and finance director to see San Bernardino’s books.