The South Carolina Supreme Court heard arguments on Tuesday from the South Carolina Retirement System Investment Commission seeking a court order directing state Treasurer Curtis M. Loftis Jr. to comply with the mandatory requirements of his job under South Carolina law.
The five justices had not ruled on the case by press time.
The commission is responsible for investment of the $26.6 billion South Carolina Retirement Systems, Columbia. As custodian of the fund, Mr. Loftis controls the flow of assets of the retirement system. He also is a commission member.
The commission filed a petition April 11 with the court, seeking to compel Mr. Loftis to fund a disputed private equity investment and “to permanently enjoin him to perform and comply with his ministerial duties,” according to court documents.
At issue was the first capital call for a $50 million commitment made in September to Warburg Pincus XI Partners. Mr. Loftis told fellow commissioners at a Feb. 28 meeting that he would not release the $11.7 million investment until he received more information about the contract.
The commission had to fund the capital call on or before Tuesday or go into default, according to the April 11 petition.
Mr. Loftis responded to the commission's petition early Monday, noting that he had authorized the Warburg Pincus funding after information he sought was provided.
The commission's reply to Mr. Loftis' court response on Monday stated: “Although the treasurer has, at the eleventh hour, finally relented and agreed to properly fund the obligation … the prospect of this unlawful conduct remains without clarification and determination from this court that the treasurer must fund lawful investment decisions as custodian.”
Sources present in the courtroom this morning who asked not to be identified agreed that both parties to the suit were closely questioned by the justices.
“We don't appreciate trying to referee kids in a sandbox,” Associate Justice Donald Beatty told lawyers from the investment commission and the treasurer's office, the sources reported.
Both Mr. Loftis and Darry Oliver, the commission's chief operating officer, said they appreciated the court's attention to the case in separate statements.