Jurisdictional Issue Clouds DFCUFinancial Case
PORT HURON, Mich. - (07/07/06) A federal judge said duringThursdays hearing on the DFCU Financial case he will defer aruling on a controversial meeting where members hope to oust theboard of directors while he determines whether he has jurisdictionover the case. Attorneys for the credit union members said thatmember/owners of the $1.8 billion want access to their creditunions books in order to determine whether the directorslaunched the failed attempt to convert to a mutual savings bankbecause they believed it was in the members best interest orwhether they stood to gain financially. U.S. District JudgeLawrence Zatkoff asked lawyers for the credit union if they have alegitimate case, why they wont grant their members access tothe records, and chided them for their position. Theycant present any evidence because you wont give themthe records, said Judge Zatkoff. The suit, filed by a formerDFCU director and another long-time member, aims to get the courtto enforce the credit unions bylaws that require it to calla special meeting when petitioned by at least 500 members. Morethan 1,700 members have petitioned the credit union to hold aspecial meeting where they hope to recall all nine directors fortheir support of the ill-fated conversion attempt. The suit seeksaccess to the books to determine how much of the membersfunds the management and board spent, first on the failedconversion, then on a broad and sophisticated campaign to defendthe directors in the face of the recall initiative.