IRONDALE, Ala. – Corporate America CU’s case against former executives and directors at U.S. Central FCU appears headed for trial as U.S. District Court Judge Inge Johnson recently scheduled a date for Dec. 6.
The $2.2-billion corporate’s CEO Thomas Bonds said he was “very pleased” with the schedule set by the judge and is “looking forward to finding out what exactly happened” when the central corporate started to fail. The discovery process will begin as soon as the sides put together a scheduling process – the scope of discovery could result in the trial date being pushed back.
In the suit, Corporate America alleges that Lenexa, Kan.-based U.S. Central violated the Securities and Exchange Act and several state laws when it solicited PIC II capital from members in late 2008 and concealed the severe extent of its investment losses. Specifically, the suit focuses on the fact that the capital converted from MCS as a result of that solicitation was depleted by OTTI charges within weeks.
In a separate but related case, Judge Johnson denied accounting company RubinBrown’s attempt to force arbitration. The firm has an arbitration agreement with U.S. Central and had been trying to impose that agreement on Corporate America, which wants to go to trial according to Bonds. RubinBrown has filed an appeal; no timetable has yet been set to hear that appeal.
U.S Central was placed into conservatorship by NCUA in March of 2009.
