In Re County of Orange
County of Orange v. Fuji Securities, Inc.
Opinion
Opinion
Taylor, J.
AMENDED SUMMARY ADJUDICATION OF ULTRA VIRES ISSUES
The Court holds that, although they may have been unwise, speculative, or unduly risky, the reverse repurchase transactions made by the Orange County Treasurer in this case were not, on the theories presented here, ultra vires and thereby void under pre-1995 law. There was authority to act. Errors in the exercise of that authority, even grave errors, were not ultra vires.
I. BACKGROUND
Faced with over a billion dollars in investment losses, the County of Orange has sued its former broker, Fuji Securities Inc., and numerous others, for liability on its losses. The County now moves for summary adjudication against Fuji on various ultra vires theories, claiming the reverse repurchase transactions entered into by its former Treasurer were ultra vires, and therefore void. Fuji opposes the County’s motion, and files its own cross-motion to adjudicate the ultra vires issues in its favor. The cross-motions squarely present the ultra vires issues, those issues have been fully briefed and argued, and the matter is ready for summary adjudication.
Repurchase agreements, commonly called “repos” in the financial community, refer to both…