CHICAGO - Crain's is reporting that Illinois Policy institute CEO John Tillman and a hedge fund is suing Governor JB Pritzker and other state officer holders, saying "$14.3 billion of bonds should be invalidated because their issuance violated the state constitution."
The violation, the lawsuit alleges, is of the state constitution's Article IX, Section 9
Crain's writes:
Warlander Asset Management, a New York-based hedge fund formed by Eric Cole, and John Tillman, the CEO of the Illinois Policy Institute, said the state’s record pension bond sale in 2003 and debt issued in 2017 to pay a backlog of unpaid bills were deficit financings prohibited by the constitution. The lawsuit was filed Monday in Sangamon County circuit court.
The goal of the debt limits in the state constitution “was to ensure that the state’s elected officials would act in a fiscally responsible manner -- that they would cut spending or make structural reforms when needed, rather than continually using deficit financing to ‘kick the can down the road’ for future generations to resolve," the complaint said. “The state’s elected officials have done just the opposite. They have mortgaged the state’s future to pay for the present."
The governor's response was defiance, saying Tillman held a "pathological focus to drive Illinois into bankruptcy:"
"This is simply a new tactic from the extreme right to interfere in capital markets. We’re done with the far right’s dangerous financial games to pull Illinois underwater. We saw this repeatedly under Bruce Rauner, who funded and executed on John Tillman’s pathological focus to drive Illinois into bankruptcy. Several layers of bond counsel and the attorney general are required to sign off on bond offerings, and these met those standards. This lawsuit is not worth the paper it’s written on."
More HERE in Crain's
