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* Dan Mihalopoulos and Tina Sfondeles…
A former business partner of Gov. Bruce Rauner is suing Rauner, but all court records in the case are being kept secret — allegedly at the governor’s request.
The lawsuit against Rauner was filed last week by Harreld “Kip” Kirkpatrick III and the Kirkpatrick Capital Partners Fund, according to Cook County Circuit Court records. […]
He said the lawsuit was filed as a “result of a dispute with a former partner” — namely Rauner, according to a memo that Kirkpatrick sent to Vistria employees. […]
“In consultation with our legal counsel, we do not believe the lawsuit should be sealed and we are hopeful that a judge will deny Gov. Rauner’s attempt to keep it from public view,” Kirkpatrick added.
Kirkpatrick filed paperwork in 2009 to run for state treasurer, and raised $20,000 from Mrs. Rauner that summer.
*** UPDATE *** The Tribune has more…
While the exact allegations remain unclear, the lawsuit against Rauner is tied to how settlement proceeds from a Michigan lawsuit were divvied up.
Kirkpatrick Capital Partners paid $10 million in 2011 for a 20 percent stake in what’s now Troy, Mich.-based United Shore Financial Services, according to the Michigan lawsuit.
Kirkpatrick served as the firm’s CEO from 2011 to 2013, but relations between him and the company’s founding family soured.
In 2015, Kirkpatrick Capital sued United Shore and Jeffrey and Mathew Ishbia, members of the founding family that remains the majority owner. The Ishbias, the lawsuit claimed, pulled the plug on Kirkpatrick’s efforts to sell the company — which by then was valued by Raymond James Financial Services at $400 million to $525 million. At least four firms expressed interest in buying the company in early 2013, but the Ishbia family suspended the sales process because it “did not want to give away so much of this newly created value to” Kirkpatrick Capital, the lawsuit says.
Go read the rest. Interesting stuff.
*** UPDATE 2 *** DGA…
This morning the Chicago Tribune and Chicago Sun-Times both wrote stories about Governor Bruce Rauner’s involvement in a lawsuit that he’s requesting to stay secret. Rauner is being sued by Kirkpatrick Capital, a firm he was still invested in 2016. From what little is known, the story feels familiar – Rauner and the other Kirkpatrick Capital investors intended to invest in an existing company quickly sell if off at profit while undercutting the owners.
“In 2015, Kirkpatrick Capital sued United Shore and Jeffrey and Mathew Ishbia, members of the founding family that remains the majority owner. The Ishbias, the lawsuit claimed, pulled the plug on Kirkpatrick’s efforts to sell the company — which by then was valued by Raymond James Financial Services at $400 million to $525 million. At least four firms expressed interest in buying the company in early 2013, but the Ishbia family suspended the sales process because it ‘did not want to give away so much of this newly created value to’ Kirkpatrick Capital, the lawsuit says.
‘The parties understood that Kirkpatrick Capital was not making a long-term investment in Shore,’ Kirkpatrick’s lawsuit against United Shore said. ‘Kirkpatrick was investing in Shore with the understanding that Shore would be marketed for sale in the near term.’”
Bruce Rauner leaned on his business acumen during the 2014 campaign, but investigative reports found that companies Rauner invested in were pushed into bankruptcy or stripped down for profits. Flash forward three years to when Governor Rauner called on the legislature to sustain his budget veto even though it would push the state into junk bond status, and a pattern emerges.
“Bruce Rauner sold voters a bill of goods when he said as a businessman he would turn the state around,” said DGA Illinois Communications Director Sam Salustro. “Just like he did in business, Rauner racked up Illinois’ debt and was pushed the state towards a fiscal cliff all for political profit. Now he wants to hide his true record from the public but it’s too late. Voters know they are worse off under three years of Rauner’s failed leadership in action.”
posted by Rich Miller
Wednesday, Oct 11, 17 @ 5:39 pm
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The amounts of Quid Pro Quo from deals like this make us realize just how corrupt Rauner is.
Comment by Generic Drone Wednesday, Oct 11, 17 @ 5:51 pm
Obviously this is all Madigan’s fault.
Rauner can’t get along with anyone but his fawning spouse
Comment by Truthteller Wednesday, Oct 11, 17 @ 5:53 pm
I remember when Kirkpatrick played basketball for Northwestern.
Comment by Wildcat Wayne Wednesday, Oct 11, 17 @ 5:55 pm
As Honeybear might say, “Perfidy.”
Comment by Lt Guv Wednesday, Oct 11, 17 @ 6:05 pm
Lawsuit? He told us he’s been a success at everything he’s done.
Oh… and schadenfreude.
Comment by We'll See Wednesday, Oct 11, 17 @ 6:22 pm
Bruce?
After seeing his work since 2015, I couldn’t imagine anyone having a need to sue him.
Comment by VanillaMan Wednesday, Oct 11, 17 @ 6:27 pm
I sure hope this Kirkpatrick fellow doesn’t have a family.
Comment by Henry Francis Wednesday, Oct 11, 17 @ 6:49 pm
If you’re paying for Dan Webb, there’s a lot of money at stake. A lot.
What are the possible reasons for putting a seal on a civil lawsuit between private equity types?
Comment by wordslinger Wednesday, Oct 11, 17 @ 6:57 pm
Q: why was Rauner entering into a business partnership in 2016 when he was already governor?
Comment by Cheswick Wednesday, Oct 11, 17 @ 7:10 pm
Hey, judges, remember this?:
A day after Governor Bruce Rauner said the Illinois Supreme Court is “part of a corrupt system,” a judges’ association fired back, calling his comments “disturbing” and saying it “endangers the rule of law.”
“The governor has shown contempt for every judge in this state By his attack on the Supreme Court and shows he misunderstands the role of the entire court system,” Appelate Justice Michael B. Hyman said.
Good luck in court, Bruce!
Comment by Yellow Dog Democrat Wednesday, Oct 11, 17 @ 7:21 pm
This is an abuse of the sealing process, courts are open.
Comment by Anonymous Wednesday, Oct 11, 17 @ 7:32 pm
Zero reason in the public interest that this should be sealed. The rich get ridiculous advantages in every phase of life.
Comment by PJ Wednesday, Oct 11, 17 @ 7:34 pm
Gtcr just raised over 5 billion mostly from existing investors. Who are these investors. Some have been our pension funds but there has been a massive increase in these her opaque funds in the last decade. There are now over 20 trillion in assets in them and they make up the biggest source of income for the top 1 percent. Considering public money is involved I think we need to know a lot more about these outfits .
Comment by David Wednesday, Oct 11, 17 @ 7:38 pm
This would be pretty big news if I thought this was going to go somewhere. Now that the existence of the lawsuit is public knowledge, it will be settled before you can say “mail fraud.”
Comment by Ducky LaMoore Wednesday, Oct 11, 17 @ 7:56 pm
“Meow,” says Diana.
But she’s the only one.
Everybody else knows the score.
Comment by Mr. K. Wednesday, Oct 11, 17 @ 8:41 pm
Spitballing a bit here, but if the fund closed in 2011, it should be done investing. Sources of partner/partner disputes at this point could likely involve the limited partner (Rauner) not kicking in his full share, a dispute over one or more of the fund investments, or limited partner discontent with the actions of the general partner.
Worth noting that Kirkpatrick went to or started a new firm while still the general partner of the old firm’s fund-kinda unusual.
A second guess here, and I could be wrong, but Rauner may have had the lawsuit sealed to avoid violating any of the confidentiality provisions in the Kirkpatrick limited partnership agreement which in turn could create legal liability for him.
I don’t find from the information presented and my Googling any reason to allege quid pro quos, perfidy, or mail fraud. Some of you guys need to get a grip, turn in early, or something.
Comment by Arthur Andersen Wednesday, Oct 11, 17 @ 8:45 pm
Don’t know why a civil lawsuit and not a divorce would be sealed. I would hope this could be challenged by a “private citizen” BGA? I do not know why Ryans divorce when he ran for senate became unsealed but sooner or later it should come out. Of course if we had a press that did some kind of investigation it might but I dream
Comment by DuPage Saint Wednesday, Oct 11, 17 @ 9:57 pm
Sorry Arthur, cant turn in early. Gotta work a double shift. However, everything Rauner does is quid pro quo. You need to see thru the trees blocking true insight.
Comment by Generic Drone Wednesday, Oct 11, 17 @ 10:03 pm
Trib has some more background- http://www.chicagotribune.com/business/ct-biz-kirkpatrick-sues-rauner-20171010-story.html
Comment by Anon221 Wednesday, Oct 11, 17 @ 10:07 pm
Generic, I’m all ears. With the benefit of the Trib article, which validates my second guess re: confidentiality provisions, please spell out the quid pro quo here.
I’m also sure it’s just a co-inky-dink (which has nothing to do with Rauner) that Kirkpatrick’s former campaign treasurer has the same, uncommon surname as the fellows that canned Kippy from a fat gig running their family business. Oh, and Diana (and most contributors) got their money back from the ill-fated campaign.
I’m guessing (original guess 1-b) that someone missed a big payday and has decided to reach for the deepest pocket to get well. Good luck with that.
Comment by Arthur Andersen Wednesday, Oct 11, 17 @ 10:28 pm
From the Tribune article this morning: “In his motion, Kirkpatrick says he filed a fully redacted complaint “in an abundance of caution and so as to avoid any liability for breaching the confidentiality provision in the limited partnership agreement.”
??????????
The confidentiality agreement he signed predates the lawsuit, and then he files a “redacted” complaint to try not to violate the confidentiality agreement, and then he writes a “memo” to all his employees explaining the lawsuit, all designed to avoid liability of breaching the confidentiality agreement?
????????????
Comment by Louis G. Atsaves Thursday, Oct 12, 17 @ 7:46 am
- Louis G. Atsaves -
Counselor,
Are you saying if you have a confidentiality agreement, and you feel legally wronged, you can’t sue in open court?
I just want you to be as clear as possible.
Comment by Oswego Willy Thursday, Oct 12, 17 @ 8:41 am
===Are you saying if you have a confidentiality agreement, and you feel legally wronged, you can’t sue in open court?===
No. He did sue in court. If he is confident of his position, then why the redacted complaint?
I guess we will know in a few months or so after all the motions and legal wrangling what this is all about.
Comment by Louis G Atsaves Thursday, Oct 12, 17 @ 9:13 am
===If he is confident of his position, then why the redacted complaint?===
Counselor,
Isn’t he asking the court to allow the redacted parts be made public? Is he trying to ensure the agreement is usurped by the judge allowing the complaint to be seen in plain view, as opposed to just not only file a complaint in court, but also allow the content to be known, by court order, not the decision of the plaintiff?
Comment by Oswego Willy Thursday, Oct 12, 17 @ 9:18 am
AA:
You know as well as anyone else that the reasons for the Governor’s actions are irrelevant. All anyone cares about is the perception and the perception is he’s trying to hide something. The issues you have laid out, true or not, aren’t relevant in the political arena.
Comment by Demoralized Thursday, Oct 12, 17 @ 9:18 am
Here’s the docket: https://courtlink.lexisnexis.com/cookcounty/FindDock.aspx?DocketKey=CABH0CH0BDDIB0CH
Comment by Anon E. Moose Thursday, Oct 12, 17 @ 9:42 am
Demo,
Whatever.
Comment by Arthur Andersen Thursday, Oct 12, 17 @ 10:08 am
$10M investment for 20%. Four years later, that stake is valued between $80M and $105M.
I’d want to cash out, too. But I can’t imagine what the cause of action is if the majority shareholders don’t want to.
But it appears Dan Webb has some ideas.
Comment by wordslinger Thursday, Oct 12, 17 @ 11:07 am
Weak sauce from the DGA. We don’t know enough yet, with or without this complaint unsealed, if there was a breach of fiduciary duty by anyone.
Comment by Arthur Andersen Thursday, Oct 12, 17 @ 5:36 pm