Repost from cutimes.com. It reads…
Jerry Logan, a former board member for the $613 million, Tuscaloosa, Ala.-based Alabama One Credit Union, initiated a class action lawsuit against the cooperative’s board of directors and at least two of its executives, according to a complaint filed in Tuscaloosa County Circuit Court Friday.
The complaint named Alabama One CEO John Dee Carruth and former Member Business Lending Manager Tammy Ewing, along with all members of the credit union’s sitting board of directors and supervisory committees, and was filed on behalf of Alabama One members. The complaint charged the defendants with violations of state law, breaches of fiduciary duty, waste of corporate assets, conspiracy, and reckless or intentional misrepresentation and suppression of material fact.
“Specifically, defendants allowed Alabama One to make ‘straw loans’ to certain members, which put the credit union at risk financially, and resulted in the unsafe practice of allowing a large concentration of Alabama One’s loan portfolio to be given for the benefit of one member-owner,” the complaint read. “Alabama One provided financing to Danny R. Butler and others, in violation of state regulations, federal regulations, laws, and Alabama One’s policies and procedures. Such acts were taken in the furtherance of Defendants’ own self-interests and the interests of their friends, co-conspirators and family,” the complaint added.
Logan, who worked as an employee of the BF Goodrich tire manufacturing plant in Tuscaloosa when Alabama One was named BF Goodrich Federal Credit Union, served on the cooperative’s board until 2004, when he left over a dispute about a renaming the credit union. He later attempted to rejoin the board several times – most recently in March 2015, when he was defeated after collecting enough signatures to run.
Logan’s complaint quoted and focused on the 18-page cease and desist order that the Alabama Credit Union Administration issued against Alabama One on April 2.
The order also quoted the NCUA’s regulations regarding the obligations credit union directors have to their members, and alleged dereliction of duties on the parts of the supervisory committee as well as the board. It noted that the supervisory committee had done nothing to reign in the provision of straw loans, even when the ACUA ordered it to do so.
The complaint also asked the court to appoint a receiver for the controversial credit union and remove its current management.