Lafayette Federal Credit Union in Kensington, Md., has filed a multimillion-dollar lawsuit alleging that its former chief executive and his son tried to sabotage the credit union's bid to convert to a mutual savings bank.
In the suit, filed last month in Montgomery County Circuit Court, the credit union's attorneys claimed that the 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 its directors.
Specifically, the five-count complaint claims that Mr. Brooks and his son, Bill Brooks Jr., set up two Lafayette Web sites that published "false, defamatory, and disparaging information" about the credit union, its officers, and its directors. The $330 million-asset credit union is seeking damages of $6 million from each defendant.
In December Lafayette members approved the credit union's mutual thrift conversion plan by an 18-vote margin among about 5,000 cast. Lafayette withdrew its conversion plan early last month after its election inspector, RSM McGladrey Inc., said it had discovered errors in the voting process and withdrawn its certification of the election.
