RICHARDSON, Texas – Texans CU filed a Chapter 11 bankruptcy petition yesterday for its Texans CUSO Insurance Group unit, because of a $6 million judgement against it by the company’s former owner.
The petition refers to legal judgements against the insurance company, acquired by the credit union in 2007 from Kevin Curley. Curley, who was fired from the business, formerly known as Curley Insurance Group, four months after the deal, sued the credit union for wrongful termination and won a $6.3 million verdict earlier this year.
The bankruptcy filing is the latest trouble for the beleaguered $1.8 billion credit union, which reported a whopping $43.9 million loss for 2008. Another CUSO owned by Texans, known as Credit Union Liquidity Services, is in litigation over a $38.9 million loan it made to renovate a Chicago-area shopping mall which is currently in default. A bankruptcy filing in that case indicates Texans expects to lose more than $12 million on the loan.
The growing troubles led to the dismissal earlier this year of David Addison, who led the credit union since 2003.
Texans officials declined to comment yesterday, referring to a prepared statement issued in the name of the credit union’s CEO Michael Sauer, saying, "It is important to note that the policyholders of Texans CUSO Insurance Group, LLC will not be affected by the filing," he said.
