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From the October-01, 2008 issue of Credit Union Times Magazine • Subscribe!
Jury Rules in Favor of Three Fired Texans Credit Union CUSO Executives
DALLAS -- The $2 billion Texans Credit Union has lost another wrongful termination case for firing some CUSO executives.<p>Nearly two years after three former Texans Commercial Capital senior staffers filed a lawsuit against the Texans Credit Union CUSO for defamation, a Dallas County jury ruled on Sept. 22 that the plaintiffs were wrongfully terminated.</p><p>An arbitrator also recently ruled against Texans and ordered that Kevin M. Curley, the former president of Texans Insurance Group, be reinstated (see story, page 36).</p><p>Former Texans Commercial President/CEO John C. O'Shea, Paul J. Valdez, former senior vice president/chief financial officer, and Joel B. Fox, former executive vice president/chief operating officer were fired in 2006 by David Addison, president/CEO of $2 billion Texans CU. The convoluted case involved defamatory statements, discussions of a bank conversion, a possible sale of Texans Commercial to a larger credit union and unpaid compensation packages, according to the petition (CU Times, Sept. 12, 2007).</p><p>O'Shea, Valdez and Fox are entitled to $1 million each, said Hal Gillespie, an attorney with Gillespie, Rozen, Watsky & Jones P.C., who represented the plaintiffs. "They were defamed. With your career, it's the equivalent of being killed and someone asking 'how are you doing,'" Gillespie said. </p><p>In a Sept. 23 e-mailed statement, Texans CU said "[Sept. 22's] verdict was disappointing. Since Texans is currently discussing options for appeal, we are limited to what we can discuss publicly. Texans will continue to vigorously defend itself against the many inaccurate and untrue allegations contained in the lawsuit," said Matt Davis, executive vice president, Texans CU.</p><p>In September 2008, Texans CU told Credit Union Times that it sold its majority interest in Texans Commercial in late 2007 as a means for the CUSO to pursue capital outside of the CU industry (CU Times, Sept. 10, 2008). The credit union retained a minority interest in the company and 100% ownership of the pre-existing loans but the majority stake was sold to a real estate professional. </p><p>Once a prosperous commercial lending CUSO, Texans Commercial Capital's delinquency rate rose sharply in late 2007 compared to 2006 and 2005 as a result of its commercial and real estate loans. The CUSO has since pulled back the reins on member business loans. Gillespie said Texans Commercial's sale was not noted by the claimants. </p><p>Meanwhile, Gillespie said he is confident that his clients will recover the compensation they are seeking. He acknowledged that the jury returned "a relatively conservative verdict" and that they were "one vote away from going into punitive damages." Still, beyond the ruling in favor of his clients, Gillespie reiterated how the two-year ordeal has affected the former CUSO executives. One plaintiff remains unemployed and two have been "underemployed" since being terminated.</p><p>"Everyone's tired and wants to regroup," Gillespie said. "We're glad that the jury ruled in their favor."</p><p>--firstname.lastname@example.org</p>
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