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Lawsuit Seeks to Stop IOU's

A small business owner is suing the Controller and the Treasurer in an effort to stop California from continuing to issue IOU’s.

Nancy Baird owns an embroidery company in San Luis Obispo. She was paid nearly $28,000 in IOU’s earlier this month for work she did for the state. Baird said she’s been unable to cash them and has now put her business up for sale. She says what the state is doing simply isn’t fair.

“Somebody’s got to say something and somebody’s got to represent the small business owners who really are the backbone of this entire country,” said Baird.

The law firm that filed the lawsuit on Baird’s behalf said it’s a class action suit, and more people are expected to join.

The suit asks the state to immediately stop issuing IOU’s and start issuing checks, and to immediately redeem all outstanding IOU’s. Right now they’re set to be redeemed in October.

The State Controller says IOU’s will continue for the near future while he and other state officials fully analyze the budget plan that Governor Schwarzenegger signed this week.