EMC attorneys file answer in lawsuit
Attorneys representing Grady Electric Membership, the board of directors and the current and former general manager filed an answer last week to a lawsuit filed by disgruntled EMC members.
The court documents filed in Grady Superior Court on Monday, Jan. 26, include a motion to dismiss and a motion to appoint a litigation review committee.
Late last year, Gordon Clyatt, Ronald Sellars, C. Seaborn Roddenbery, Jerome J. Ellis and Roy Brock filed suit against the EMC, its board of directors and General Manager Thomas A. (Bo) Rosser Jr., and former general manager Thomas A. Rosser Sr.
The plaintiffs are suing the EMC over the way it retains capital credits then only disburses them to deceased members, and for business decisions made including using EMC funds to purchase stock in a local bank and then selling the stock to Rosser Sr., while financing the purchase with a loan from the co-op among other things.
Rosser Sr., is being represented in this matter by Greg Michell of Stanley, Esrey & Buckley of Atlanta. Other attorneys for the defendants include Hugh B. McNatt of Vidalia; T. Joshua R. Archer, M. Anne Kaufold-Wiggins, and Matthew B. Ames of Balch & Bingham of Atlanta; M. Clair Chason of the Chason Law Firm in Cairo; V. Gail Lane of Altman & Lane in Thomasville; and Thomas Conger of Bainbridge.
Documents filed with the court indicate that the defendants are seeking the appointment by the court of an independent litigation review committee to investigate the claims of the plaintiffs to determine whether it is in Grady EMC’s best interest for the claims to proceed.
Lawyers for the defendants claim that under Georgia law, the court may dismiss a derivative action proceeding if a panel of one or more independent examiners makes a good faith determination that “the maintenance of the derivative suit is not in the best interests of the corporation.”
Counsel for the defense note the “Defendants are prepared to demonstrate they at all times acted properly, in good faith, in the best interest of Grady EMC….”.
The defendants also question the form of the complaint and issues of statute of limitations.
According to court documents, the defendants admit that Thomas A. Rosser Sr., was a founding director of United National Bank prior to Grady EMC’s purchase of United National Bank stock. They also admit that the EMC sold Rosser Sr., the stock in 2004 and that he failed to make scheduled payments on the loan the EMC gave him to purchase the stock.
However, the defendants do not admit to declaring Rosser in default. They also admit they increased Rosser Sr.’s, pay over the life of the loan.
Defendants also admit that Rosser Sr., kept his personal cars in Grady EMC’s heated shop from “time to time.” They also admit that EMC mechanics serviced and repaired his cars with parts paid for by Rosser Sr.
In the court documents, the defendants admit to spending $3.8 million on renovations of the EMC headquarters in Cairo, but they deny allegations of graft.
Defendants deny the directors and officers of Grady EMC have personally and unjustly enriched themselves as claimed by the plaintiffs.
Judge Loring Gray of Albany has been named the judge in this case and his ruling will determine how the case goes forward.
The federal tax return of Grady EMC for 2013 was recently made public and the public records show that management and directors both received increased compensation in 2013 over 2012.
Rosser Sr., served as general manager in 2013 before the board hired his son to take over as general manager in 2014. Rosser Sr., remains on the payroll as a consultant.
Rosser Sr.’s, total compensation grew ever slightly from $329,473 in 2012 to $330,369 in 2013, but public records show that EMC Manager of Operations Wayne Windham received a considerable increase in his total compensation and benefits. The 2012 tax return indicates Windham received a pay and benefit package valued at $144,701, which in 2013 grew to $184,045, an increase of $39,344.
Members of the board of directors also received increased compensation, which ranged from as little as $571 for G. Willis Smith to $1,721 for H. Lamar Strickland. Reportable compensation for the board members in 2013 was $16,372 for Dewey Brock; $12,507 for James Freeman, $7,168 for H. Lamar Strickland; $10,678 for G. Willis Smith; $10,152 for Donald Cooper; $11,596 for H. Lamar Carlton; and $11,596 for Robert E. Lee.
The recently filed tax return also indicates that Rosser Sr., made payments of $31,556 on the $375,000 loan he got from the EMC board to buy the United National Bank stock from the EMC. Those payments left a balance due, as of Dec. 31, 2013, of $140,646.
At the Grady EMC annual meeting in October, 2014, officials told EMC members that Rosser’s loan had been paid in full.
The tax return for 2013 does not indicate the salary of new EMC General Manager Bo Rosser.