Following some legal jousting over governance issues, a Milwaukee judge put off until next Tuesday naming of a receiver of Central States Mortgage Co.
Meeting with more than a dozen lawyers representing CSMC, bank and CU creditors and the prior management ousted last year, Milwaukee County Circuit Judge John DiMotto said he was putting off a receiver ruling in the bankruptcy-type proceeding while awaiting more financial data from CMS.
Attorney Stephen Kravit, representing former CEO Richard Jungen and other ex-executives, called on the court to pick a receiver while management of CSMC, majority owned by 25 Wisconsin and Illinois CUs and the Wisconsin Credit Union League, asked the court to name Morris Anderson & Associates, a Chicago-management consulting firm advising underperforming businesses to be the receiver.
Citing what he said were illegal votes taken by the CSMC board before and after the CUSO's March 9 collapse on various issues, Kravit charged the CUSO "is a lawless company" and is improperly spending funds to defend itself.
CSMC attorney David Meany countered the firm is being properly governed by its board, which includes Dean Wilson, chairman of the Wisconsin League and president/CEO of Focus CU in Menomonee Falls.
In a press statement, Wilson, CSMC chairman, said simply "the matter before the court will be decided based on the law and facts," adding "our primary concern is doing what is best for our customers, creditors, and former employees by providing an orderly transition of our business." Among major CSMC creditors is Members United Corporate FCU of Warrenville, Ill. owed $32.5 million on a defaulted funding loan.
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