LENEXA, Kan. – A year after the takeover of U.S. Central FCU, David Dickens, the former chief investment strategist who was fired as losses began to spiral out of control at the one-time $52 billion corporate credit union, is fighting with NCUA over the terms of his severance.
Documents filed with NCUA show that immediately after U.S. Central fired Dickens as its executive vice president of asset liability management last Feb. 5, Francis Lee, then-president of U.S. Central, hired a law firm to determine whether he could fire Dickens for “cause,” an important term when determining large severance payouts for corporate executives. The review of Dickens’ departure determined on March 4 that he was fired “without cause.”
Dickens, who had worked at U.S. Central for 21 years, was the only executive brought to public responsibility up to that point. When NCUA took over U.S. Central two weeks later, on March 20, it fired Lee as well, and removed all nine U.S. Central directors.
In his role at U.S. Central, Dickens was the chief architect of the corporate’s portfolio strategy which invested heavily – eventually a third of its portfolio – in mortgage-backed securities. Growing losses on the investments forced U.S. Central to fire Dickens, but only Dickens, as losses were mounting. The firing came a month after U.S. Central, based on Dickens’ projections, estimated 2008 losses would be about $100 million. The losses turned out to be more than $1.2 billion.
The documents filed with NCUA show Dickens is disputing the terms of his severance and believes he is owed money for unpaid leave, COBRA health care payments and a legal defense of his dispute with U.S. Central. The severance package also included up to 18 months of outplacement services.
His severance payment included $706,992 for 18-months salary, 2008 paid time off of $25,379, a benefit payment of $21,396, and 2009 time paid off of $9,064, for a total of $762,831.
An employment contract signed by Dickens illustrates an often contentious clause included in many executive agreements which required Dickens to agree to "resign," lest he be fired and entitled to reduced severance.
The contract also requires U.S. Central to indemnify Dickens if he is subject to any civil or criminal action while carrying out his duties for the company if he was "acting in good faith" and in the best interests of U.S. Central. Dickens has been named in at least one civil suit brought by a corporate credit union over the failure of U.S. Central.
NCUA said the posting of the Dickens information was erroneous. “NCUA mistakenly posted confidential correspondence on its website for several hours on February 25, regarding a settlement that has been reached with former US Central FCU Executive Vice President David Dickens,” said John McKechnie, chief spokesman for the agency. “The item was removed from the website shortly after NCUA staff was notified of its posting. The placement of the correspondence was completely accidental, and NCUA regrets the error."
"Mr. Dickens was terminated prior to the conservatorship of US Central in March 2009. The terms of Dickens' separation were thoroughly reviewed by NCUA following the conservatorship,"" said McKechnie. "NCUA determined that it was contractually obligated to pay Dickens' post-separation salary and life insurance premiums. In addition, Dickens was entitled by law to the accrued balances in two deferred compensation accounts because they represent monies paid prior to the conservatorship and held in trust for Dickens' benefit. However, NCUA disallowed Dickens's claims for post-termination deferred compensation contributions and post-termination health insurance premiums, a specific employer contribution to his deferred compensation plan, payment for the prior year's unused paid time-off, and reimbursement of legal fees. Dickens has
appealed the disallowed items."
