Lutkauskas v. Ricker

January 23, 2015 by Justia

Resident taxpayers of Lemont-Bromberek Combined School District 113A filed three taxpayer derivative actions on behalf of the District, asserting that certain officers and employees of the District and current and former members of its board of education had improperly transferred money from the District’s Working Cash Fund, in violation of the School Code (105 ILCS 5/20-1). Plaintiffs also sought recovery against the surety that issued the bond for the District’s treasurer and against the accounting firm that performed audits of the District’s finances. The circuit court of Cook County dismissed. The appellate court and Illinois Supreme Court affirmed. To seek recovery under section 20-6 for the unlawful diversion of funds or for breach of fiduciary duty, a plaintiff must allege that money improperly transferred from the Working Cash Fund was used for an improper purpose, resulting in an actual loss to the school district. View "Lutkauskas v. Ricker" on Justia Law