Discounting
Coops
are obligated to return the Capital Credits constituting Members equity
ownership in the Coop. These Capital Credits belong to Coop Members
and are similar to the stock ownership of conventional for profit
corporations.
Many Coops do repay Capital Credits but reduce the amount paid to
Members for their Capital Credits under the theory that since the
Members are getting their money back early it should be reduced or "Discounted".
Some
believe that Discounting is appropriate provided that the amount is not
excessive and the Members are given notice of what is being done;
however, some coops have applied excessively large discounts and failed
to fully reveal what they are doing.
This issue is being litigated with several Coops.
CoServ Electric (Texas) Litigation