June 3, 2022
Dear Lyons Township High School Community,
The purpose of this communication is to provide the Lyons Township High School District 204 community with an update regarding the ongoing legal dispute with the Lyons Township Treasurer’s Office (TTO)
You may recall that District 204 was embroiled in an 8-year long lawsuit brought by the TTO. In May, 2021, the Judge decided that lawsuit in favor of District 204, and denied all three major claims the TTO brought against District #204 (payment for audit costs, setoffs against expenses for LT’s business function costs, and allocations of investment earnings). The TTO had sought about $6.5 million in damages from District #204, and the TTO spent about $4.2 million in legal fees on the case. Almost all of District 204’s legal expenses were covered by insurance, but LT had to pay a pro rata share of the TTO’s legal fees due to its membership in the TTO. For more details on the
previous lawsuit, click here.
Below is a high-level overview of the timeline since the Judge’s ruling in June 2021.
District 204’s Withdrawal from the TTO
As a result of the ruling, District 204 was allowed by state law to withdraw from the TTO, which it did effective July 1, 2021. State law required the TTO to transfer all of District 204’s funds in assets to the District, but the TTO did not fully comply. Initially, the TTO withheld $6 million of funds in District 204’s account from the transfer, refused to meet to discuss the financial matters with District 204 and declined our requests for financial information and documentation.
In September 2021, the TTO stated that it intended to take nearly $1.3 million in funds from District 204's account for what it claimed were over-allocations of investment earnings dating back to 1995, despite the fact that the Judge rejected this same claim in the now-resolved lawsuit.
Current Lawsuit
In September 2021, District 204 filed a lawsuit to prevent the TTO from taking money from LT’s account and to require the TTO to transfer all assets due to District 204. In addition to funds that the TTO took from District 204’s account, District 204 is entitled to receive its share of investment earnings that the TTO never distributed to its member districts, as well as District 204’s share of funds that the TTO borrowed from the districts to finance the TTO’s operations and cover its past fraudulent activities.
At District 204’s request, the Judge in the new lawsuit entered an order of injunction requiring the TTO to hold the funds it took from District 204’s account in a separate, frozen account pending further order of court. District 204 was successful in forcing the TTO to transfer some of the frozen funds, about $4 million, to District 204. District 204 will continue to pursue its right to receive all of the funds due from the TTO.
Attempts to Resolve the Current Lawsuit
The Judge has encouraged the parties to try to resolve these disputes. In October 2021, District 204 proposed a mediation, which the TTO rejected. In November 2021, District 204 asked the TTO to attend a settlement meeting. The TTO never responded. District 204’s ability to resolve these disputes is hampered by the fact that the TTO still has not released its audit report detailing its finances for the fiscal year ending June 30, 2021.
The TTO has continued its combative and obstructive approach to the litigation, as well as its long-standing lack of transparency and responsiveness about its finances. District 204 fully expects to prevail in the current lawsuit, as we did in the prior lawsuit, but we will remain open to meaningful discussion with the TTO in an effort to resolve these disputes as swiftly as possible.
Thank you.
Brian Waterman
Superintendent
