years in the Army National Guard, asserts in her
lawsuit that the IOUs conflict with the California Prompt
Under that law, Baird's complaint states, recipients of
the IOUs were due a 0.25-percent daily penalty rate for interest,
rather than the 3.75-percent annual interest rate the state pays on the
The lawsuit also notes that Baird was unable to pay sales tax to the state -- with its own IOUs -- owed as a result of her sale to the California National Guard of uniforms and polo shirts for a military youth camp. She now owns a screen-printing and embroidery business.
The lawsuit in Sacramento Superior Court names only Baird as a plaintiff but was filed as a class-action suit in anticipation of more business owners joining her. If successful in proving that the state underpaid its many IOU creditors, the suit could have a significant financial impact on California's coffers. The complaint states that 450,000 IOUs worth about $2.6 billion were issued during the 2009 budget crisis.
H/T | Courthouse News