October 7, 2014
The Fluvanna County Board of Supervisors accepted a demand to drop its long-running lawsuit against McGuireWoods client Davenport & Co. LLC over the financing of a new high school, and issued a public statement retracting assertions it made about Davenport’s services.
McGuireWoods partner Joseph Reid presented the demand to the Board of Supervisors on Sept. 15 and the board voted Sept. 25 to accept it. As part of the agreement, Fluvanna County issued a public statement Oct. 2 acknowledging that Davenport provided reasonable advice on the high school financing, that the county suffered no subsequent financial harm, and that statements made in the lawsuit about Davenport were inaccurate.
“We are very pleased that this litigation has concluded with a dismissal, and one which clears the reputation of our good client Davenport,” Reid said.
The Fluvanna County board filed a lawsuit against Davenport, its financial advisor, in 2011, alleging that the firm gave misleading advice on bond financing for construction of a new high school in 2008. A Davenport advisor recommended a standalone financing option to issue $67.5 million in bonds through the Virginia Public School Authority. Reid noted in a letter to the county that Davenport’s advice proved to be reasonable because the county was able to refinance the high school debt in 2012 to save more than $10 million in interest costs.
The Fluvanna board’s lawsuit also contained a baseless allegation that a Davenport advisor had lied to the board during its deliberations. The current board in its Oct. 2 statement expressed regret for mistaken statements in the lawsuit pleadings.
“We are certainly glad to see an end to this lawsuit, and to have the public statement by the Board in connection with its voluntary dismissal,” said Davenport CEO and President Lee Chapman in a news release. “Davenport has always stood by the advice its advisors gave the County, and the integrity of that advice has proven itself over time. This case had no legitimate basis and strong political overtones from the outset. We only regret that it took three years of litigation for the Board to reach the conclusion that it was without merit.”