BRADENTON, Fla. — JPMorgan and Houston Astros owner James Crane are fighting an Alabama bankruptcy judge’s order to open Crane’s confidential settlement with the bank over $35 million of Jefferson County’s defaulted auction-rate sewer warrants.

Separate motions were filed late Wednesday asking federal Judge Thomas Bennett to reverse a ruling he issued last week granting Jefferson County’s request related to Crane’s lawsuit against JPMorgan.

The county asked Bennett for access to Crane’s case, citing Rule 2004, which allows a bankruptcy petitioner to depose a party and seek documents that may relate to the acts, property, liability or the financial condition of the debtor. Bennett considered the request for one day and ruled in favor of the county the next.

At issue is a lawsuit Crane filed against JPMorgan in February 2010. It was settled Jan. 12, several days after a jury trial began in Harris County, Texas.

Crane’s complaint alleged that the bank violated the Texas Securities Act for “untruths and omissions” related to his purchase of the auction-rate securities in January 2008.

Crane bought the warrants from a dealer in Texas. Some of the securities defaulted about a month after they were purchased, though all eventually soured.

“We settled on a confidential basis early in the trial, and we’re pleased that the parties were able to resolve their differences,” said Crane’s attorney, Barrett Reasoner, a partner with Gibbs Bruns LLP.

Crane also filed suit against Bainbridge Financial Services LTD, the firm that sold him the warrants, though a confidential settlement was reached before the case went to trial, according to the lawsuit. Bainbridge did not respond to a request for comment. JPMorgan declined to comment.

A motion filed by Crane asks Bennett to vacate his order.

The Major League Baseball team owner said that he had no relevant knowledge about Jefferson County’s affairs, that the county was seeking personal financial records not pertinent to the bankruptcy case, and that JPMorgan could produce the documents.

JPMorgan supported Crane’s motion and said the county was inappropriately attempting to use Rule 2004 to obtain information in Crane’s case that would help the county pursue its own lawsuit filed in 2009 charging the bank, and others, with fraud related to the sale of sewer debt.

Jefferson County’s lawsuit is pending in state court, though it is on hold due to an automatic stay that went into place when the county filed the country’s largest municipal bankruptcy Nov. 9 after failing to reach a restructuring agreement on its $3 billion of defaulted sewer warrants.

A hearing on the reconsideration motions filed by Crane and JPMorgan was scheduled Thursday afternoon.

Though terms of Crane’s settlement may never be known, others who bought Jefferson County’s auction-rate sewer warrants are still forced to hold them.

An investor, who spoke on the condition of anonymity, also purchased Jefferson County’s ARS in January 2008 and expressedconcern about the fate of the securities.

“I bought them to hold some money as an investment, and now I am stuck with them,” said the investor, who added that he considered the securities safe because they were insured by Financial Guaranty Insurance Co., which was highly rated at the time.

The investor said he was told that he did not qualify to have the illiquid securities purchased back by JPMorgan because he used a broker other than the bank to buy them. He declined to say how much of the debt he held.

“It’s a serious amount of money,” he said, adding: “Am I going to lose my principal?”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.