Grady EMC lawsuit has been settled
Grady EMC and a group calling itself the “Take Back Our Grady EMC” committee have settled a lawsuit filed by the group of disgruntled EMC members.
Judge Loring A. Gray Jr., signed the consent order dismissing the case Friday.
Both sides are claiming victory in the settlement.
Grady EMC President and General Manager Bo Rosser issued a letter to the EMC membership and provided a news release to The Cairo Messenger that notes, “It is important to know that in all of the legal back and forth there was no finding of wrongdoing on the part of Grady EMC.”
Rosser also wrote, “The dismissal is good news for Grady EMC and its members as it removes a distraction and allows our team to maintain its focus on serving each of you.”
The Take Back Our Grady EMC committee, including plaintiffs in the lawsuit Gordon Clyatt, Ronald Sellars, C. Seaborn Roddenbery, Jerome J. Ellis and Roy Brock, is claiming the settlement was a round one victory in a continuing fight.
The group is claiming victory for forcing an early retirement of former EMC President and General Manager Tommy Rosser; forcing the EMC board to adopt a policy prohibiting the EMC from loaning money to officers or directors of the EMC; forcing the EMC board to adopt a policy prohibiting work on employee vehicles or storage of employee vehicles by the EMC; and forcing the board to adopt a policy prohibiting the campaigning for board positions on EMC property.
The lawsuit questioned the financial management of the EMC in addition to the purchase of stock in United National Bank and the subsequent sale of the stock to Rosser Sr., who purchased the stock with a loan made to him by the EMC. According to Rosser Jr., that loan has been paid in full.
The committee, in a paid advertisement in this issue of the newspaper, states that their focus will turn to electing new board members as each member’s term expires.
“In the coming weeks and months, we will present the facts of the case in the newspaper and social media. The membership has to make a very important decision at the next election for directors in October. Do you want the Grady EMC to continue as it has for the past 77 years, or do you want change?” the committee’s ad states.
Under the terms of the settlement, the EMC, in addition to adopting new policies, also must sever its relationship with Tommy Rosser, who has been paid as a consultant to the EMC since his son was named the new president and general manager on Jan. 1, 2014.
According to Bo Rosser, his father had a four year contract. Under the terms of the consent order signed by Judge Gray May 20, 2016, Rosser Sr., was forced to resign effective upon entry of the order and the board was to buy out the remainder of his contract. The court order states, “Rosser Sr., shall no longer have any affiliation with Grady EMC or any entities owned, wholly or partially, by Grady EMC. Following his resignation, Rosser Sr., shall no longer receive any income from Grady EMC or its affiliates other than the buyout of his contract and any benefits to which he is otherwise entitled as a result of his past employment or membership, including but not limited to his retirement and 401 (k) benefits.”
Take Back Our Grady EMC committee members say one of the stipulations that was required before settling the case was the ouster of Rosser Sr. “We will continue to gather information about all of his actions during his tenure at the EMC and will discuss in upcoming articles,” the committee states in its paid advertisement.
The settlement agreement also calls for the creation of a special committee to study issues related to Grady EMC land holdings, patronage capital, travel and company vehicle policies, board policies, and board election practices including absentee voting.
The settlement agreement prohibits the committee, including any members of the plaintiffs who filed the suit or current members of the EMC board, from serving on the special study committee. The court document also prohibits Johnny Bell, a 2015 candidate for the EMC board, from serving on the committee.
The plaintiffs in the suit will appoint one member to the committee and the EMC board will appoint one member. Those two appointees will select the third member to the committee, which will make non-binding recommendations to the Grady EMC board at its September meeting.
“Take Back Our Grady EMC” members say the special committee was the only suggestion made by the EMC during mediation and they do not have much hope it will make an impact. “Keep in mind to whom the committee reports (the EMC board),” the committee states in their advertisement.
However, the new policies to be adopted and the issues to be reviewed by the special committee are all changes the EMC has been considering and planning “for some time and are happy to implement them immediately,” says Bo Rosser.
The “Take Back Our Grady EMC” committee offers a different opinion and said all of these changes were required by the plaintiffs to settle the case.
Bo Rosser says, “Our hope is the (special) committee will provide a fresh perspective and offer ideas to make Grady EMC a better organization. It was thought it would be best to have individuals that have not been personally connected to the EMC or its governance process as members of that committee.”
“Take Back Our Grady EMC” committee members said they only decided to settle the case after realizing it would take hundreds of thousands of dollars to see the court action through until the end.
In their ad the committee writes, “Grady EMC had 11 lawyers, an accounting firm on their payroll and unlimited funds. We had two attorneys and very limited funds.”
The committee states that the litigation review committee, made up by John S. Sims Jr., of Tifton; J. Converse Bright, of Valdosta; and F. Faison Middleton IV, of Albany., appointed by Judge Gray to review the allegations in the suit, met at Grady EMC on two separate occasions in December 2015 and then on Jan. 12, 2016 the “Take Back Our Grady EMC” committee received a proposed settlement from the EMC’s attorneys.
According to committee members, that proposal was rejected. Then, in early February the EMC’s attorneys submitted another proposed settlement that was also rejected.
On March 25, on the recommendation of the litigation review committee, members of the “Take Back Our Grady EMC” committee, EMC representatives and attorneys for all parties met in Tifton for mediation. After a marathon session lasting in excess of 10 hours, no agreement was reached.
Approximately two weeks later, the litigation review committee submitted a proposed settlement to the “Take Back Our Grady EMC” that the group agreed to sign with some changes.
Committee members say they are confident no new policies would have been adopted by the EMC if the group had not filed suit.
The committee pledges to continue its fight to see a minimum of $25 million in patronage capital returned to the members of Grady EMC. They point out that other EMCs like Talquin Electric and Colquitt EMC annually pay dividends to its members.
The committee also is continuing to target the removal of Bo Rosser, the current board of directors, the attorney for EMC as well as the current accounting firm. They say they also hope to have a forensic audit of the EMC performed and shared with the membership.
In settling the suit, the EMC agreed to pay $75,000 in attorney’s fees for the plaintiffs. According to Rosser, this will be paid for by the EMC’s insurance. Rosser would not comment on how much the EMC had spent in legal fees as a result of the litigation, but said that any legal representation sought by individuals in the case would not be paid for by the EMC. “Grady EMC was covered by our insurer throughout the process which includes legal matters for our officers and directors,” Rosser said.
In the press release issued this week by the EMC, EMC Board Chairman Lamar Carlton praised Tommy Rosser, who served as the president and general manager from Jan. 1, 1992 until Dec. 31, 2013.
“Tommy Rosser has served Grady EMC with distinction for more than 25 years and his efforts have led to the establishment of flexible and efficient energy sources for our members while transforming the EMC into a modern organization. We appreciate his years of service to our members and his assistance through our transition in leadership,” Carlton said.