In re Boise County

Boise County (plaintiff) was a municipality in the State of Idaho. In 2009, two companies (collectively, Alamar) (defendants) filed a lawsuit against Boise County, alleging violations of the Fair Housing Act. In late 2010, the jury ruled in Alamar’s favor, and the court entered a $4 million judgment against the county (the Alamar judgment). The county could also owe up to $1.5 million in Alamar’s attorney fees and costs. The county attempted to negotiate with Alamar to pay a reduced amount on the judgment and made a settlement offer of $3.2 million. Alamar rejected the offer and moved aggressively to execute its judgment. In March 2011, the county petitioned for Chapter 9 bankruptcy protection. The county’s financial documents showed that it was generally paying its debts as they came due except for approximately $550,000 of medical-indigency claims, which were up to two years old. The county had apparently discovered the medical-indigency claims in preparing schedules for the bankruptcy petition. The county had assets of over $27.7 million and liabilities of about $7.4 million, including the $4 million Alamar judgment and $1.5 million for Alamar’s attorney fees. The county had cash or cash equivalents of $9.9 million and the ability to pay emergency liabilities by issuing debt or through other financing methods. Alamar disputed the county’s insolvency.