Title
Partial Settlement Agreement and Release in RTA, et al. vs. City of Kankakee Litigation - Approval
History
In the fall of 2011, the Village of Orland Park joined in the lawsuit filed by the RTA, Cook County, and a number of suburban municipalities against the City of Kankakee and the Village of Channahon (“Municipal Defendants”), a number of sales tax broker entities (“Broker Defendants”), and retailers, claiming that the defendants had conspired to improperly source sales of goods outside of the plaintiffs’ jurisdictions to avoid local and regional sales taxes. The Village of Orland Park is a co-plaintiff in this lawsuit, which is being managed and directed by the RTA in consultation with the co-plaintiffs. The basis of the complaint is centered on Section 8-11-21 of the Illinois Municipal Code which allows local governments to recover tax revenue that was improperly sourced as a result of illegal sales tax agreements entered into after June 1, 2004.
Proposed Partial Settlement: At the encouragement of the Court, the RTA entered into settlement discussions with various groups of defendants and has come to tentative settlement terms with the Municipal Defendants and Inspired Development, LLC and Ryan, LLC, two of the Broker Defendants, which would release those Broker Defendants and settle claims with regard to approximately $860,000 in funds being held in escrow by the Municipal Defendants. This agreement would not end the lawsuit, but it will simplify the case going forward.
The key terms of the Settlement Agreement are as follows:
---1) A cash settlement of $450,000 for the co-plaintiffs to be drawn from the funds being escrowed by the Municipal Defendants that the Inspired and Ryan Broker Defendants assert claims on. This constitutes a recovery of approximately of $0.50 on the dollar of sales tax revenue that the co-plaintiffs assert was improperly sourced in cooperation with the Inspired and Ryan Broker Defendants.
---2) Full release of the I...
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