Failed CU Convert Lafayette FCU Seeks Retribution

KENSINGTON, Md. – Lafayette FCU has filed a multi-million dollar lawsuit against its former CEO and his son for their alleged role in the credit union’s ill-fated conversion to mutual savings bank, the latest in a series of moves aimed at exacting retribution for the conversion debacle. In a suit filed in state court in Maryland, the credit union attorneys claim former CEO Bill Brooks violated the terms of a 2004 separation agreement in which he agreed not to speak or write negatively about the credit union, its officers or directors; and also claim Brooks and his son, Bill Brooks Jr., were responsible for two Lafayette member websites that successfully fought the conversion to banks. The sites allegedly published ‘false, defamatory and disparaging information’ about the credit union, its officers and directors, according to the suit, which asks for damages of $6 million from both men. The action comes a week after the credit union closed the checking account and cut off access to its ATMs for Scott Stiens, a leader of the conversion opponents, for his efforts to collect petition signatures at Lafayette branches for the recall of the board of directors. Earlier credit union attorneys threatened to sue The Credit Union Journal for its coverage of the special meeting of members where the 90-day ballot was culminated. The suit claims that Brooks Sr., who was well-known in the industry for his service on the NAFCU board, violated the ‘non-disparagement clause’ in his separation agreement and asked the court to order him to repay $314,000 in severance and pay $3 million in damages for the alleged harm to the credit union’s reputation and business prospects resulting from the failed conversion. The suit was filed by the credit union’s local law firm, of which Lafayette Chairman Arnold Roesnthal’s brother is a principal partner.