The blockbuster credit union trial of the summer won't happen.
That is the news out of Birmingham, Ala., as word circulated that a suit filed by Corporate America against a roster of prominent credit union executives who had been officers and directors of failed U.S. Central has been settled days before the scheduled Aug. 1 start date.
Corporate America Credit Union v. Herbst et al – which named as defendants now-CUNA CEO Bill Cheney, former WesCorp CEO Robert Siravo, former Members United CEO Joseph Herbst and more – was filed over Corporate America's allegation that the December 2008 conversion of some $450 million in member capital shares into Tier One capital resulted in wiping out hundreds of millions of dollars' worth of capital.
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Central to Corporate America's argument is the contention that officers and directors of U.S. Central knew the converted capital would be wiped out by the corporate's mounting losses.
Terms of the settlement have not been disclosed.
Attorney David R. Donaldson of Donaldson & Guin LLC in Birmingham – lead lawyer for Corporate America – indicated in a telephone conversation that he would have no comment.
Thomas Bonds, CEO of Corporate America, did not return calls asking for comment.
A call to an attorney for the defendants also went unreturned.
Another party with a tangential involvement to the case indicated that he was prohibited from saying anything beyond no comment.
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