As complex investments plunge, 5 school districts pressured over loans

By Amy Hetzner of the Journal Sentinel

Posted: Jan. 3, 2010

As five Wisconsin school districts face increased pressure to return millions of dollars in loans, the $200 million in investments they undertook with money from that debt are almost entirely without value and unlikely to pay back when they mature in 2013, according to representatives for the districts.

The districts said in a statement to the Journal Sentinel that one of the investments had stopped paying interest two months ago after a dramatic decline in value. The statement did not indicate which investment had ceased paying interest, but one of the schools' attorneys, Stephen Kravit, had earlier identified it as an investment devised by the Royal Bank of Canada known as Sentinel Limited Series 2.

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