Lawsuit accuses CECC of 'unjust enrichment' at the expense of members
The Lovely County Citizen
Friday, July 3, 2009
A lawsuit filed June 10 in Benton County against Carroll Electric
Cooperation Corporation (CECC) alleges the company has oppressed
shareholders and violated its fiduciary duties for unjust enrichment.
CECC spokeswoman Nancy Plagge had no comment on the lawsuit because
it has not yet been reviewed by the CECC attorney. The complaint by Joe
Capps, of Siloam Springs, individually and on behalf of all other
present and former coop members, said as a non-profit corporation, CECC
cannot earn a profit.
$170 million
"The cooperative is obligated to pay by credits to a capital account
for each patron, all such amounts in excess of operating costs and
expenses," the complaint filed in Benton County Circuit Court states.
"Carroll Electric possess over $170 million of 'patronage capital' or
'capital credits.' Carroll Electric pays neither interest nor dividends
for use or on account of the patronage capitol ... the cooperative does
not return patronage capital to former members, or excess capital to
current members." . . .
The lawsuit alleges the board has irresponsibly endangered the coop's tax-exempt status by retaining the capital credits.