Alabama's top regulator and the former CEO and board of the failed $193 million Mutual Savings Credit Union of Birmingham have settled their legal dispute although the CU remains under state conservatorship.
In a brief statement issued last week, Dale Dalbey, the Mutual president who was ousted last July from the Birmingham CU along with seven directors by Administrator T. Glenn Latham over charges of mismanagement, have agreed to settlement terms calling for Dalbey and the board to be "reinvited" to their former jobs once the conservatorship is lifted.
The settlement caps a legal battle in a state court over complaints by Dalbey and the board that regulators acted arbitrarily and wrongly in placing Mutual under state control. Latham countered that the CU got into deep trouble on faulty commercial loans and was operating "in an unsafe condition" and board members had "spent money wildly."
In a Columbiana, Ala., court, Dalbey and the directors vigorously disputed the claims seeking an injunction to overturn the conservatorship and restore their jobs.
Hearings on the Oct. 26 suit before Shelby County Circuit Judge Hewitt L.?Conwill?were eventually postponed as the parties began negotiating a settlement.
The Jan. 18 press statement said the parties "as a result of the settlement" have been invited to rejoin the CU once the state conservatorship is terminated.
Dalbey, former treasurer of the League of Southeastern Credit Unions and an ex-member of CUNA's corporate task force, maintained Mutual's problems related to economic conditions in the area. Moreover, the former management argued that Mutual's low capital position at the time was no different from other Alabama CUs and Mutual should not have been targeted for conservatorship.
?jrubenstein@cutimes.com
