Two "unusual expenses" are preventing executives from projecting year-end numbers, Chief Financial Officer Jim Hayes told members yesterday in Western Corporate Federal Credit Union's monthly financial Webcast.
WesCorp discontinued its defined benefit plan as of Nov. 1, and may expense $14 million related to the plan this year, he said.
Additionally, WesCorp will expense $500,000 to cover potential legal costs associated with the negligence and breach of a fiduciary duty lawsuit filed against current and former WesCorp employees and volunteers, Hayes said.
CEO Phil Perkins discussed the lawsuit further, saying that while he recognizes "the thirst for accountability" and "demand someone take responsibility for what has happened," he said the suit was not "the best way to move forward," especially in a cooperative system.
WesCorp operates with a retained deficit guaranteed by the NCUSIF, Perkins explained.
"Let me be clear on this: WesCorp has no money," he said. Although the suit names individuals as defendants, plaintiffs retained the right to add additional defendants. Additionally, the suit could trigger a claim on WesCorp's indemnification insurance coverage, he said.
"Claims will be paid out of your pocket and out of the pockets of all insured federal credit unions," Perkins said.
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