Tuesday, March 12, 2013 | 12:45 p.m.
CARSON CITY — The state Board of Finance refused Tuesday to settle a $30 million lawsuit filed by Lehman Brothers Commercial Bank, which lost the state’s business when the company’s financial status was downgraded.
Lehman contends the state of Nevada broke its contract when it stopped its business and investments with the bank.
The board met for 25 minutes behind closed doors to discuss a suggestion by a settlement judge with the Nevada Supreme Court.
“We didn’t settle,” said Gov. Brian Sandoval, the chairman of the board. “There was no vote.”
Details of the proposed settlement were kept confidential, and the meeting was closed to the public on grounds that it was a discussion between an attorney and client.
State Treasurer Kate Marshall said settlement discussions will continue, and the board will consider the issue again in 60 days.
District Court Judge James Wilson granted a summary judgement in favor of the state in the case, but his ruling is on appeal by Lehman. Wilson said Moody’s Investors Service downgraded Lehman to B3 in 2008.
Marshall said Lehman filed bankruptcy, and the state collected 33 cents on each dollar of $50 million invested with the bank.
Marshall said Lehman’s rating was a junk bond status, and the state stopped giving the bank access to its business. Lehman maintains the state broke a contract and wants $30 million in damages.
Wilson said the Board of Finance and the State Treasurer’s Office “lawfully terminated the agreement” with Lehman and were “entitled to cease all future deliveries of debt services monies” to the banking company.
Sandoval said the suit with the Supreme Court is still moving forward.