News from the South - Kentucky News Feed
KY settlement with hedge funds delayed as judge orders mediation in state workers’ lawsuit
by Tom Loftus, Kentucky Lantern
February 17, 2025
FRANKFORT — A Friday afternoon court order will delay and possibly jeopardize final approval of the recently announced settlement of a long-running lawsuit over controversial investments by Kentucky Retirement Systems in hedge funds more than a decade ago.
That high profile case alleged that some former officials of the retirement systems (since restructured as the Kentucky Public Pensions Authority or KPPA) and four big investment firms violated their fiduciary duties beginning in 2011 by gambling more than $1 billion of Kentucky pension money on hedge fund investments that carried high risk, high fees and low transparency.
Early last month Kentucky Attorney General Russell Coleman, who is pressing the case for the state, announced that he had reached a settlement in which the investment firms agreed to pay $227.5 million to the state’s pension system, but admit no wrongdoing.
A key part of the settlement required dismissal of other lawsuits related to the same claims.
However, attorneys representing four Kentucky public employees who filed a separate case against the same defendants have objected to the proposed settlement in motions filed with Franklin Circuit Judge Thomas Wingate, who must approve the settlement before it becomes final.
These attorneys, led by Michelle Ciccarelli Lerach, said the settlement would recover only a “pittance” for the state but result in a “bonanza” of as much as $45.5 million from the settlement for private attorneys hired under contract by the attorney general’s office to represent the state.
But the main objection by Lerach was that the proposed settlement of the original suit would dismiss her separate case.
Judge orders mediation by mid-March
Wingate heard arguments Wednesday on Lerach’s motions, and late on Friday he granted Lerach’s request that the separate case be referred for resolution to a mediator.
Wingate directed that parties in this separate case agree on a mediator. He said if they do not agree on a mediator they must give him a list of three mediators and he would pick one.
“The mediation shall be conducted by March 14,” Wingate ordered.
The judge had previously scheduled a hearing on whether to approve the proposed settlement of the original case for Feb. 26. Because of his order directing mediation in the separate case, Wingate postponed that hearing until March 26.
In response to Kentucky Lantern’s request for comment on the impact of Wingate’s order, Coleman released this statement: “The Commonwealth’s proposed settlement remains in place for Kentucky workers and retirees. We will continue reviewing the court’s order to determine the path forward for the Commonwealth, KPPA, and all beneficiaries.”
But Lerach said the order was a “complete victory” for her clients in the separate case.
“In light of Judge Wingate’s order, it is extremely unlikely that the Attorney General‘s settlement will go forward as currently attempted — if at all,” Lerach said in a statement. “The Court ordered our case to mediation and we intend to mediate with the hedge fund sellers to reach a real settlement. If that cannot be done, we will be able to go ahead and litigate our claims without any further interference from the Attorney General.”
Grahmn Morgan, an attorney representing three investment firms (KKR & Co., Prisma Capital Partners, Pacific Alternative Asset Management) who are defendants in the original case as well as Lerach’s separate case, said he had no immediate comment on Wingate’s order.
Vanessa Cantley, one of the Louisville attorneys working under contract with Coleman’s office in the original case, also declined comment.
Cameron revived case after Supreme Court ruling
The original case was brought by a group of eight state pensioners in late 2017 alleging that the financially troubled Kentucky Retirement Systems gambled with the hedge fund investments that resulted in big losses. The defendants said there was no wrongdoing, that the actions were all legitimate investments.
A major development in the case happened in July 2020 when the Kentucky Supreme Court ruled that the plaintiffs — whose pensions had not been reduced and were protected in law by a legal doctrine called an “inviolable contract” — did not have standing to file their claims. The high court sent the case back to Franklin Circuit for dismissal.
But then-Attorney General Daniel Cameron intervened and the court allowed him to take over as the plaintiff to recover damages to the pension system.
His office contracted with two of the attorneys for the plaintiffs in the original case — Ann Oldfather and Cantley, of Louisville — to handle the case for the state.
But in 2021 Lerach and some other attorneys who originally worked with Oldfather and Cantley in representing plaintiffs in the original case filed a new separate case on behalf of our state employees. These new plaintiffs had standing because they were hired after a 2013 pension reform law put them into a new hybrid cash balance pension plan whose state pensions do not enjoy the same security as the plaintiffs in the original case who were hired before 2013.
On Jan. 8 Coleman put out a statement announcing the original case had been settled and that boards of the KPPA had voted to approve the settlement. He said the big investment firms had agreed to pay $227.5 million, money he said would go to Kentucky’s pension funds. Coleman’s statement noted that this total included the return of about $145 million that had been held in reserve by Prisma, one of the defendants.
Lerach’s objections to the settlement say that this $145 million is not a recovery by the state because it always has been the property of Kentucky’s pension system. Lerach said the proposed settlement involves just $82.5 million in “fresh money” to the state. Moreover, Lerach said that under terms of contracts with the attorney general’s office, the attorneys representing Coleman in the original case can claim $46.5 million in legal fees if the settlement is approved by Franklin Circuit Court.
Among other things, Lerach’s separate case argues that Prisma must return the $145 million to Kentucky’s pension system with penalty and interest — a total of about $807 million.
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Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.
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News from the South - Kentucky News Feed
KY Senate votes to stop state funding of hormone treatments for transgender prisoners
KY Senate votes to stop state funding of hormone treatments for transgender prisoners
by Sarah Ladd, Kentucky Lantern
February 18, 2025
This article mentions suicide. The number for the National Suicide Prevention Lifeline is 988.
A bill that would end hormone treatments for 67 Kentucky inmates and prohibit the use of public funds for any future gender-affirming surgeries for transgender prisoners passed the Senate Tuesday along party lines 31-6.
Opponents called the bill cruel and politically-motivated when it was heard in committee.
The sponsor, Senate Majority Whip Mike Wilson, R-Bowling Green, pushed back on that accusation when introducing the measure on the Senate floor. Wilson also pointed out that Kentucky excludes transgender treatments from its Medicaid benefits and said taxpayer dollars should not be used to pay for transgender treatments for prisoners either.
“I’ve been criticized that we are somehow being inhumane by taking these folks off of these cross-sex hormones. But I will tell you that in the bill we provide for that, that a physician says that if it is something that would harm them, by taking them off cold turkey, they can cycle them off of these hormones,” he said. “These are the only medical services that we’re prohibiting. They can still get all the other medical services that a normal person would get. So, we’re not being inhumane.”
Senate Bill 2 says public dollars cannot be used to fund a “cosmetic service or elective procedure” for Kentucky inmates including for “cross sex hormones” and “any gender reassignment surgery.” It also says if a health care provider documents that ending a treatment would harm an inmate, use of the drug or hormone may be “systematically reduced and eliminated.”
Wilson pointed to the controversy late last year over a Kentucky Department of Corrections policy allowing transgender inmates to apply for gender-affirming treatments, saying the department went about that “under the cover of darkness, out from the public view.”
Sen. Karen Berg, D-Louisville, whose transgender son died by suicide in 2022, called the bill a “fearmongering” effort while evoking the Salem witch trials.
“This is nothing but … a continued witch hunt to make sure that the most vulnerable people in this state are outed and abused and tortured for no reason other than you’re not comfortable with it,” she said. “They did not burn witches. They didn’t hang witches. Not one person that was hung at the Salem witch trials was a witch. They hung women — real, live people with real lives, over mass hysteria, over fear that is being propagated by lies coming from leadership of the Republican party to your door, and I don’t know why we put up with it.”
Bill barring use of public funds on transgender treatments for Kentucky inmates advances
Sen. Lindsey Tichenor, R-Smithfield, asked if biologically female inmates have access to breast reduction for health reasons, if they receive hormone replacement therapy for hot flashes and if they’re given feminine care products at taxpayer expense. Wilson said he did not believe they got the period products or breast reductions, but did not know about the hormone treatments.
“Female inmates are not even treated with the dignity to have medical treatment covered by taxpayers for necessary, basic, common necessities and cosmetic surgeries that have health implications,” Tichenor said. “This bill is a priority, in my opinion, because we’re dealing with the issue of spending taxpayer dollars on issues that are exacerbating a false reality for inmates. It doesn’t matter how many hormones you put them on, which lead them eventually towards surgery, and that is the goal, they cannot change who they are.”
Tichenor also said she thinks male prisoners would take hormones with the goal to “eventually be in women’s prisons.”
The opposition: The Constitution and misplaced priorities
Democrats focused their arguments against the bill on the protections against cruel and unusual punishments guaranteed by the Eighth Amendment of the U.S. Constitution and the potential cost of lawsuits based on constitutional claims. They also slammed the high priority of SB 2, saying they believed other issues deserved that attention.
Here’s how state lawmakers are taking aim at transgender adults’ health care
“We have a long line of cases that say that when a physician deems something to be medically necessary for someone, it is, in many cases, unconstitutional for the government to enact a blanket ban to deny it,” said Sen. Cassie Chambers Armstrong, D-Louisville.
“Of course, when we take folks into custody and they are unable to access health care in any way except through us, and a licensed physician has determined that something is medically necessary, for the government to step in and say ‘we know better,’ is unconstitutional,” said Chambers Armstrong.
Minority Caucus Chair Sen. Reggie Thomas, D-Lexington, said the high priority of the bill is a way to “vilify the LGBTQ community.”
“We’ve got schools that are underfunded. We’ve got rural hospitals going out of business. We’ve got a serious problem with over 600,000 children on Medicaid. And this is our No. 2 priority,” Thomas said. “I would submit to the public today and to this body that our priorities are really out of whack.”
Senate Bill 1, the chamber’s top priority, reduced the state income tax. It already has been signed into law by the governor.
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Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.
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News from the South - Kentucky News Feed
As Kentucky kids lose more learning to weather, lawmakers ponder relief
As Kentucky kids lose more learning to weather, lawmakers ponder relief
by McKenna Horsley, Kentucky Lantern
February 19, 2025
FRANKFORT — Snow, ice, sickness and now floods have kept Kentucky students out of classrooms this winter.
Amid the “extraordinary circumstances,” state lawmakers are looking for ways to make up for missed instruction and relieve schools.
The severe flooding that hit Kentucky over the weekend is forcing some schools to close or use NTI — non-traditional instruction — days, when students participate in virtual learning at home. Districts are typically allowed no more than 10 NTI days in a school year.
Some schools are running out or have already run out of NTI days after bad winter weather or sickness in recent weeks. Kentucky law requires school districts to provide 170 student attendance days and offer a minimum of 1,062 instructional hours.
A House committee this week advanced a bill that would allow schools to meet or have those requirements waived and make up missed days in a few different ways.
One option under House Bill 241 would allow districts to lengthen the school day but not to longer than seven hours of instruction. Local school boards could revise their calendars and submit plans to the Kentucky Department of Education for approval, under the bill, and if a district cannot make up days by June 4, the state education commissioner could waive up to five student attendance days.
The primary sponsor, Rep. Timmy Truett, presented the bill to the House Primary and Secondary Education Committee Tuesday. Truett, a McKee Republican and elementary school principal, introduced the bill the first week of February.
The committee amended the bill in response to the recent flooding by adding a provision also allowing Education Commissioner Robbie Fletcher to grant up to five “disaster relief student attendance days” when schools could provide instruction without having students in the classroom, Truett said. The bill makes no mention of NTI which Truett acknowledged has become unpopular.
Some school districts began using NTI days as a pilot program to make up for lost classroom time because of school closures for weather or sickness. During the coronavirus pandemic, all Kentucky school districts became eligible for NTI days in March 2020.
NTI not popular but ‘beats the alternative’
Truett told his fellow lawmakers that most educators know that “the term NTI days is not a very popular word” and virtual learning is “not as good as in-seat instruction.”
“I’m telling you firsthand — it is not,” Truett said. “It’s not, but it does beat the alternative. When you’re off school for two weeks because of weather or not going to see your kids for a month because of flooding, a virtual instruction day is so much more valuable than not seeing your kids at all.”
Truett also acknowledged that the legislature would not approve a bill that would outright increase the number of NTI days.
“This is just a fix for this year,” Truett said. “Hopefully, we never have to see a bill like this ever again. But this is the only flexibility that we can give our districts at this point.”
Rep. Felica Rabourn, R-Turners Station, was the lone no vote on the bill. She said while questioning Truett that she strongly opposes more NTI days. “If it were up to me, we would have zero,” she said.
As of Monday afternoon, 154 of Kentucky’s 171 school districts had used an NTI day during the 2024-25 school year, according to the Kentucky Department of Education. Of those districts, 37 had used 10 NTI days and one school district had used 13 NTI days.
In most cases, school districts are allowed a total of 10 NTI days for a school year. The education commissioner retroactively approves the use of NTI days in late spring. Under the current law, NTI days exceeding 10 would have to be made up at the end of the school year.
While most uses of NTI days have been for weather or health issues, some Eastern Kentucky districts used NTI days or closed amid a manhunt for a shooting suspect in September.
Republican President Robert Stivers, of Manchester, told reporters Tuesday afternoon that lawmakers understand school districts are dealing with “extraordinary circumstances.” He said “the bottom line in these discussions with Tim (Truett) … and talking to the commissioner and talking to superintendents is, how do we most effectively get those students to maximize their learning capabilities and experiences?”
Stivers said that whatever solution is agreed upon will likely appear in Truett’s bill by the end of the legislative session. Stivers added that “we’re trying to be methodical about what we do” and there should be some discussions with superintendents about changing school calendars and those should happen “pretty soon.”
The processes proposed in the bill would not be available until it passes the General Assembly and is signed into law by the governor, Truett said. He estimated the solution was “two weeks at the best away.”
“This is just an option, if needed, if you have some emergency days, some flooding, some bad ice storms, tornadoes,” Truett said. “In Kentucky, who knows? Who knows what we’re going to experience?”
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Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.
The post As Kentucky kids lose more learning to weather, lawmakers ponder relief appeared first on kentuckylantern.com
News from the South - Kentucky News Feed
Morning snow ends in Louisville with more on the way at night; 9 a.m. weather forecast Feb. 19
SUMMARY: Weather updates indicate light snowfall tonight, following one and a half inches from yesterday and over an inch this morning. Cumulatively, this could bring totals to around three inches across the area. Current totals are higher in some regions like Elizabethtown and Radcliff, approaching four inches. As we enter tonight, expect scattered snow showers with additional minor accumulations. Temperatures will remain cold, with highs near 25 and lows dropping to 13. Forecasts predict an ongoing chilly trend into Thursday before warming up with sunshine and temperatures reaching the 50s by next week.
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Morning snow ends in Louisville with more on the way at night; 9 a.m. weather forecast Feb. 19
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