Texans Loses Wrongful Termination Lawsuit
DALLAS-A jury last week ruled in favor of three form executives with Texans Commercial Capital Advisors, a CUSO formerly owned by Texans Credit Union, who had filed suit claiming defamation and wrongful termination.
The jury ruled that the three former executives, John C. O'Shea, its former president; Paul J. Valdez, its former SVP/CFO, and Joel B. Fox, its former EVP/COO are entitled to $1 million each in damages, according to the trio's attorney. All three were fired in 2006 by Texans CU CEO David Addison, with the firing leading to accusations there were plans to convert the CU to a bank or sell off Texans Commercial Capital Advisors, among others. The $2-billion TCU sold its interest in Texans Commercial in the latter part of 2007. Earlier this year Texans lost a separate lawsuit filed by Kevin Curley, president of Texans Insurance Group, also for wrongful termination. Curley has since returned to the credit union. Texans was unavailable for comment at press time.
CalCoast CU Absorbs Financial 21 CU
SAN DIEGO-Having just completed a major merger with First Future CU, California Coast CU said it now plans to absorb Financial 21 CU via another merger. The now $1.8-billion CCCU, which merged with the $900-million First Future recently, said it has applied to California's regulators to merge with the $132-million Financial 21, which has 11,500 members. The two CUs told local media that a merger would shave about $6 million in annual expenses when the combination is complete, which would be during Q1 2009 at the earliest.
NJCUL Is Changing Governance
HIGHTSTOWN, N.J.-New Jersey's credit unions approved bylaw amendments changing the governance structure of the League. Following recommendations from the Governance Task Force that included both affiliated and non-affiliated CUs, league members have approved a plan to: reduce the board's size to nine from 15; implement term limits as three consecutive, three-year terms; implements asset tiers for board representation with three seats for credit unions $25 million and under, three seats for credit unions over $25 million, and three at-large positions for any asset size; require board members to be either a president/CEO or a director of a credit union in good standing with the NJCUL; and eliminate the geographical representation of the past governance structure.
The changes will go into effect for the next election cycle, beginning in October, and all nine board seats will be up for election, with the new board being seated in January 2009. Separately, league members also voted to change the governance structure of the NJCUL's service corporations by opening up board seats to individuals outside of the NJCUL board and creating a seven person board, and approved an Executive Committee to make decisions on behalf of the board in between board meetings under certain situations that require immediate action while allowing the board to meet every other month, rather than monthly.
Belco Sued Over Retirement Funds
HARRISBURG, Penn.-Five members of Belco Community CU filed suit against the CU over losses they realized on their retirement savings accounts.
In a suit filed in Dauphin County Court, the long-time members claim they lost money because of the advice given to them by a financial planner with CUNA Brokerage Services Inc., which operated out of an office at Belco.
The retirees claim they were advised to withdraw more money from their retirement accounts than they should have and were steered toward shares of certain mutual fund families that carry higher fees.
The retirees did not file a lawsuit against CUNA Brokerage Services, a unit of CUNA Mutual Group, or the financial adviser because regulations require them to file a complaint at the Financial Industry Regulatory Authority, which they plan to do.
According to a spokesman at CUNA Mutual, the cases filed against the credit union involve members whose investments were affected by the 2000-2003 market downturn. "This is a highly regulated industry and the business practices used by CUNA Mutual and Belco are sound and appropriate," said the spokesman.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
