Yesterday in U.S. District Court, the NCUA lost its motion to "substitute in as plaintiff" entirely for seven mid-sized credit unions that sued Western Corporate FCU directors and employees.
At issue was the question of whether the negligence and breach of fiduciary duty suit merited a derivative claim or a direct claim. The NCUA argued the right to, at the very least, all derivative claims. Credit union plaintiffs argued their right to direct claims.
The judge declared both potentially right. According to court documents, the NCUA will substitute as plaintiff on any derivative claims, and the seven credit union plaintiffs may continue with any direct claims.
But there's a catch: the two sides must work together and present a "joint amended complaint" in court Aug. 31.
Lead credit union plaintiff Stuart Perlitsh, president/CEO of the $282 million Glendale Area Schools FCU, told Credit Union Times Judge George Wu also scheduled an Aug. 5 "status conference", in which both sides must appear before the judge to report on the progress of the case, and how well the two sides are working together.
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