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Capital Credits

Cooperative Litigation Update: N.C. Court Rules on Coop’s Discounting Program

In another lawsuit concerning cooperatives’ capital credit practices, a North Carolina trial court ruled in favor of a cooperative that we previously wrote about in another blog post.

The court ruled, based on the facts at issue, that the cooperative had no fiduciary duty to the plaintiffs, which were a group of deceased members’ estates.  In addition, it declared that the cooperative had authority to adopt a procedure for retiring deceased members’ capital credits on an accelerated and discounted basis.  However, it expressly did not rule on whether the cooperative, in practice, properly discounted the capital credits.   In other words, the court reserved judgment on the specific manner of discounting the particular capital credits at issue in this case. Read More »Cooperative Litigation Update: N.C. Court Rules on Coop’s Discounting Program

Class Action Continues Before State Public Service Commission

Another class action proceeding has been filed against Carroll Electric Service Corporation, this time before the Arkansas Public Service Commission.  In a previous post, we discussed the Arkansas Superior Court’s dismissal of a civil action filed against Carroll.  This latest filing largely continues that litigation, just at a different forum.

Read More »Class Action Continues Before State Public Service Commission

Capital Credit Litigation Update: Court Affirms Dismissal of Capital Credits Lawsuit

In a previous post, we discussed litigation against cooperatives involving their capital credit practices. That post contains a link to a summary discussing specific cases. One of those cases involved Carroll Electric Cooperative Corporation, an Arkansas electric cooperative. Earlier this month, the Supreme Court of Arkansas affirmed a lower court’s dismissal of the case.

Cooperatives’ Capital Credit Accounts Viewed as Lucrative Targets for Class Action Litigation

Several electric cooperatives throughout the country have been the subject of class action lawsuits targeting their unretired capital credits. The lawsuits were filed by one or more members or former members against the cooperative and, in some instances, against directors and management. In this blog post, we discuss one non-legal measure to avoid such lawsuits and bolster coopertives’ defenses. We recommend education of cooperative management, employees, directors, and especially members.