Kenosha Unified and four other school districts have paid more than $1.3 million to lawyers in hopes of recovering $200 million from an investment gone bad, and the case hasn’t yet gone to trial.

That will change next week.

After several months of legal wrangling, a Milwaukee circuit judge will consider a request on Tuesday from Stifel Nicolaus and The Royal Bank of Canada to dismiss the case on grounds the school districts haven’t proven fraud in their 57-page complaint.

Sources said it’s highly unlikely the case will be thrown out, and the judge will most likely order a jury trial starting next September.

Kenosha Unified, Kimberly, Whitefish Bay, West Allis, and Waukesha borrowed a combined $200 million in December 2006 to invest in a collateralized debt obligation to fund future retirement costs, in hopes that returns would outpace interest paid on the loans.

According to court documents, the investment has lost more than $190 million. But the actual number is probably much higher, based on a review of several documents. According to that paperwork:

The school districts maintain Stifel Nicolaus misled them into buying what they thought were AA- and AAA-rated bonds that would pay off by December 2013.

Instead, the districts bought risky credit default swaps, which Warren Buffet has called “financial weapons of mass destruction.” Credit default swaps are insurance plans taken out between two parties, with one party paying money as insurance in case a bond defaults, while another party agrees to pay money if it does.

However, a nine-page Power Point presentation obtained by the News that was shown to all five districts shows on Page 5 that investments were in credit default swaps with an average rating of BBB+. Board members have maintained that information was glossed over and they were repeatedly assured the investment was conservative and safe.

Stifel-Nicolaus has maintained that school districts signed papers acknowledging they had legal representatives and advisers who went over the investment.

An open records request filed by the Kenosha News shows the five school districts have paid lawyers $1,383,510.67 for all services to date, splitting legal fees based on how much they initially invested. Broken down by district:

The law firm is charging $325 an hour for attorneys’ fees, $150 for paralegals and law clerks, and an undetermined amount for a public relations firm. In addition, the law firm will collect a fee from any possible settlement — 5 percent or $2.5 million off the first $50 million, up to 15 percent of the entire amount.

An official for the district said it has taken lawyers this long to prepare because Stifel-Nicolaus and Royal Bank of Canada have tried for eight months to move the case to a federal court. That was rejected by the courts.

Stephen Kravit, a lawyer representing the districts, said the motion to dismiss is a “common defense strategy” that won’t work.

“I am confident that the judge will deny if not all of their motions, substantially all of their motions. The facts and figures in our amended complaint is 57 pages in length and contains 210 paragraphs of allegations of fact. One reason to file a motion to dismiss is to delay litigation and elongate the process. Surely these defendants are aware that we represent school districts and every dollar is dear to a school district. These defendants are just pushing the process out, and are hoping the districts will tire of the expense and hassle and possibly settle for less.”

Kravit said the plaintiffs haven’t made any settlement offers. “I’m not soliciting and if these people want to make up for their evil deeds, they know where to find us,” he said.

School district lawyers maintain the investment package was loaded with sub-prime mortgages and shaky credit card debt. Although David Noack, a Stifel-Nicolaus vice president at the time, told districts it would take “15 Enrons” for the investment to lose money, district lawyers say the reality is only a few companies would have to default for the investment to lose everything.

Shawn Yde, the business manager from Whitefish Bay School District, said districts weren’t told specifically what they were investing in, and Stifel-Nicolaus didn’t provide that information for months.

Not so, says a spokesman for Stifel Nicolaus, who asked not to be named.

“For the lawyers representing the school districts to attack the firm in this way is not only inaccurate and irresponsible, but also reflects a lack of understanding of the investment program and product involved. They continue to mischaracterize the relationships between the parties. Their comments demonstrate how far they are willing to go to avoid accountability ... ”

Additionally, Mark Kirsch, a lawyer representing the Royal Bank of Canada, maintained the bank was only responsible for putting the investment together and not responsible for the district’s decision to buy it.