RESOLUTION NO. RS2003-38

A resolution authorizing Lincoln Capital Fixed Income Management Company, LLC to act as the Metropolitan Government’s agent and to employ Gibbs & Bruns, LLP to represent the Metropolitan Government in a lawsuit against National Premier Financial Trust XII and other defendants.

Whereas, The Metropolitan Government of Nashville and Davidson County, acting through its Benefit Board, employs Lincoln Capital Fixed Income Management Company, LLC (“Lincoln Capital”) to manage a portion of its pension fund; and

Whereas, Lincoln Capital purchased approximately $875,000 worth of an asset-backed note issued by National Premier Financial Trust XII, Inc. (“NPF XII”) on behalf of the Metropolitan Government’s Benefit Board; and

Whereas, the former vice president for compliance of NPF XII’s parent company, National Premier Financial Trust, has plead guilty to securities fraud; and

Whereas, NPF XII is believed to have made materially misleading statements about the financial viability of its notes to investors; and

Whereas, NPF XII has defaulted on its obligations to many investors, including cities, counties, townships, banks, and insurance companies all across the country; and

Whereas, specifically NPF XII has defaulted on its obligations to several of Lincoln Capital’s clients, including defaulting on approximately $800,000 of its obligation to The Metropolitan Government; and

Whereas, Lincoln Capital, acting as agent for several of its other clients, has already engaged Gibbs & Bruns, LLP, 1100 Louisiana, Suite 5300, Houston, Texas, to sue NPF XII and other defendants in the case styled City of Chandler et al. v. Bank One, N.A. et al., Docket No. CV031618, in Arizona Superior Court for the County of Maricopa; and

Whereas, Lincoln Capital agrees to act as agent for The Metropolitan Government and retain Gibbs & Bruns, LLP in the lawsuit on a contingency fee basis in accordance with the terms and conditions contained in the attached authorization of representation letter. Lincoln Capital also agrees to advance The Metropolitan Government’s pro rata share of the litigation expenses to Gibbs & Bruns, such share to be based upon The Metropolitan Government’s percentage of the total investment of all of the plaintiffs in the lawsuit. Lincoln Capital further agrees that if the Metropolitan Government’s recovery is less than the Metropolitan Government’s pro rata share of the litigation expenses, then Lincoln Capital will absorb any remaining expenses; and

Whereas, the Director of Law believes that authorizing Lincoln Capital to be The Metropolitan Government’s agent and to retain Gibbs & Bruns, LLP to represent The Metropolitan Government on a contingency fee basis, with Lincoln Capital advancing The Metropolitan Government’s pro rata share of the litigation expenses, is the best option available for The Metropolitan Government to recover all or a portion of its investment in NFP XII; and

Whereas, Section 8.607 of the Metropolitan Charter provides for the employment of special counsel when the interest of The Metropolitan Government requires it;
Now, therefore, be it resolved by the Council of The Metropolitan Government of Nashville and Davidson County:

Section 1. The Metropolitan Government shall authorized Lincoln Capital to act as its agent and to retain Gibbs & Bruns, LLP to add the Metropolitan Government as a plaintiff in the case styled City of Chandler et al. v. Bank One, N.A. et al., Docket No. CV031618, in Arizona Superior Court for the County of Maricopa.

Section 2. Gibbs & Bruns, LLP is to be paid on a contingency fee basis in accordance with the terms of their authorization of representation letter, attached.

Section 3. Lincoln Capital is authorized to advance the Metropolitan Government’s pro rata share of its litigation expenses in the above styled lawsuit.

Section 4. This resolution shall take effect from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Brenda Gilmore

LEGISLATIVE HISTORY
Referred to:	Budget & Finance Committee
Introduced:	October 21, 2003
Adopted:	October 21, 2003
Approved:	October 21, 2003
By: