The legal clash from last October pitting Alabama's topregulator against the CEO and board of the $193 million failedMutual Savings Credit Union of Birmingham, has been settled out ofcourt, it was announced this week.

In a joint statement, Administrator T. Glenn Latham along withthe ousted CEO Dale Dalbey and Mutual directors said "as a resultof the settlement" Dalbey and the board have been invited to rejointhe CU once a state conservatorship "is terminated."

Mutual has been under Latham's control since last July after theregulator charged the CU had been badly mismanaged. Dalbey andboard members countered the CU's collapse and commercial loanlosses related to economic conditions in the area. Moreover, theformer management argued the CU's low capital ratios at the timewere no different than other Alabama CUs and therefore the CUshould not have been targeted for conservatorship.

Joined by the dismissed directors, Dalbey, a former member ofthe CUNA Board and ex-treasurer of the League of SoutheasternCredit Unions, filed suit in a Columbiana, Ala. state court inOctober to overturn the conservatorship and restore theirpositions.

The statement this week from the parties said "terms of thesettlement are confidential" noting also there "would be no othercomments" about the pact.