A Cook County judge sided with Gov. Bruce Rauner on Friday, dismissing a lawsuit filed against him by a former business associate and ruling the two parties should settle the dispute in arbitration as opposed to open court.
“Illinois policy strongly favors resolution of disputes by arbitration, particularly when prescribed broadly as it is here,” Cook County Judge David B. Atkins wrote Friday.
Harreld “Kip” Kirkpatrick III filed suit against Rauner in Cook County Circuit Court, alleging he and Rauner had reached an oral agreement – discussed in part on the balcony of the governor’s mansion — about a $67.5 million settlement.
Dan K. Webb and William O’Neill, Kirkpatrick’s attorneys, said in a statement that they were disappointed in the ruling but still confident.
“We had hoped this case would be heard in open court and not behind closed doors,” the statement said. “It’s unfortunate that Mr. Rauner has insisted that it take place away from public view, but we remain confident in our case, regardless of where it is heard.”
A spokeswoman for the governor said that he has been made aware of the ruling, but “is not involved in day-to-day investment decisions.”
The dispute involves the business deal that dates back before Rauner’s election as governor over the allocation of the $67.5 million settlement. Unsealed documents Kirkpatrick filed on Tuesday contend the settlement allowed Rauner to turn a $15 million profit on a $5 million investment, which “apparently is not enough for Rauner,” because he was seeking more.
Kirkpatrick and Rauner invested together in Kirkpatrick Capital Partners Fund I, a limited partnership that acquired a 20 percent minority share in United Shore Financial Services, a privately-held Michigan based mortgage lender.
Kirkpatrick joined United Shore as CEO in 2011 and negotiated a “transaction bonus” that gave him an escalating percentage of proceeds from the sale of the business. As he tried to sell United Shore, however, Kirkpatrick was replaced as CEO. That led to litigation in Michigan, which resulted in the June 2016 settlement. Kirkpatrick contends the settlement covers both the money owed the investor group, as well as his transaction bonus.
Rauner’s lawyers have accused Kirkpatrick of “a continuing pattern of self-dealing” and argued he will be unable to prove his allegation that he and Rauner reached an oral agreement about the settlement.
