The blockbuster credit union trial of the summer won't happen. That is the news out of Birmingham, Ala., as word circulated that the headliner suit filed by Corporate America against an all-star roster of credit union luminaries 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 vs. Joe Herbst et al, which named as defendants Bill Cheney, Robert Siravo, 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 1 capital resulted in wiping out hundreds of millions of dollars worth of capital.
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, declined to 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.
One party with a tangential involvement to the case indicated that he was prohibited from saying anything beyond no comment and that, in fact, he was not permitted, under the terms of the agreement, from saying the agreement prohibited comment.
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