A new suit in Copia case

By JENNIFER HUFFMAN
Register Business Writer

A Copia creditor filed a class action lawsuit Wednesday against Copia’s bond insurer and two banks involved with Napa’s bankrupt center for food, wine and the arts.

Copia Claims, LLC, charges that the 1999 bonds funding the 12-acre center in Napa’s Oxbow District were fraudulently transferred from one set of bondholders to another during a 2007 refinance.    

According to documents filed in the U.S. District Court in Sacramento, Copia Claims alleges violations of federal securities laws. The suit also questions a $71 million deposit transferred to an escrow account for the 1999 bondholders.

Copia Claims describes statements made in the 2007 bond prospectus as “materially false and misleading” and states that the prospectus “misrepresented and omitted material facts.”

The class Copia Claims represents reportedly consists of as many as 5,000 persons and entities with an interest in the 2007 bond re-issue.

Known in the bankruptcy world as a claims trader, Copia Claims became a Copia creditor in April when it purchased an original creditor’s claim for $4,000.

The class action suit names Copia bondholder representative and trustee Bank of New York Mellon, bond sponsor California Infrastructure and Economic Development Bank, and Copia bond insurer and lien holder ACA Financial Guaranty Corporation.

The suit asks the court to recognize the case as a class action and then seeks compensatory damages “in an amount to be proven at trial.”

It’s unclear how the class action lawsuit might impact the Copia bankruptcy case, currently before the U.S. Federal Bankruptcy Court in Santa Rosa. The first hearing in the Copia Claims class action lawsuit is scheduled for Sept. 21 in U.S. District Court in Sacramento.

Copia President Joe Fischer and ACA President and CEO Ray Brooks both declined to comment on the lawsuit. Bill McGrane of Copia Claims was unavailable to comment.

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