Cobb EMC agrees to pay members $98 million after settling… | www.myajc.com

10
Oct

Cobb EMC agrees to pay members $98 million after settling… | www.myajc.com

Cobb EMC will pay an estimated $98 million to current and former members of the cooperative in a settlement of a lawsuit reached Thursday after three years of often contentious negotiations.

The dispute was over profits that were supposed to be returned to the cooperative’s members but instead were spent on things such as naming rights to a performing arts center.

Tens of millions of dollars also allegedly were directed to a for-profit corporation benefiting former CEO Dwight Brown and other EMC officials. Millions more went to lawyers defending Brown on criminal charges, according to the lawsuit, filed in January 2010 by three former members and later joined by current customers.

About 177,000 current customers and more than 500,000 former members of the cooperative, formed in 1938, are eligible for reimbursements, Cobb EMC President and CEO Chip Nelson said. The lawsuit claimed that Cobb EMC failed to abide by the terms of its charter, which requires the cooperative to repay customers from its excess earnings.

“These have been difficult negotiations over a problem to which there is no perfect solution,” Nelson said. “The court has preliminarily approved the settlement so that we can disburse the required capital credits, close the books on this chapter in our company’s history, and put an even stronger focus on our core mission of providing electrical power to our service areas.”

As a nonprofit, Cobb EMC is required to account certain profits as capital credits to be returned to its customers on a revolving basis. The credits are based on power usage.

via Cobb EMC agrees to pay members $98 million after settling… | www.myajc.com.

Comments ( 0 )