Suit on Failed Alabama CU Settled
The legal clash from last October pitting Alabama's top regulator against the CEO and board of the $193 million failed Mutual Savings Credit Union of Birmingham, has been settled out of court, it was announced this week.
In a joint statement, Administrator T. Glenn Latham along with the ousted CEO Dale Dalbey and Mutual directors said "as a result of the settlement" Dalbey and the board have been invited to rejoin the CU once a state conservatorship "is terminated."
Mutual has been under Latham's control since last July after the regulator charged the CU had been badly mismanaged. Dalbey and board members countered the CU's collapse and commercial loan losses related to economic conditions in the area. Moreover, the former management argued the CU's low capital ratios at the time were no different than other Alabama CUs and therefore the CU should not have been targeted for conservatorship.
Joined by the dismissed directors, Dalbey, a former member of the CUNA Board and ex-treasurer of the League of Southeastern Credit Unions, filed suit in a Columbiana, Ala. state court in October to overturn the conservatorship and restore their positions.
The statement this week from the parties said "terms of the settlement are confidential" noting also there "would be no other comments" about the pact.