U.S. District Judge Inge Johnson today denied U.S. Central Federal Credit Union director defendants their motion to dismiss the suit filed by Corporate America Credit Union.
Citing "complex factual issues that are more appropriately addressed in motions for a summary judgment," Johnson signed the legal order earlier today. Late last week, she denied a separate motion to dismiss filed by U.S. Central's accounting firm, RubinBrown LLP.
The judicial order means Corporate America can now enter the discovery phase of pre-trial, in which both parties may subpoena each other to request documents and other evidence.
The Irondale, Ala.-based retail corporate has accused U.S. Central of violating the Securities and Exchange Act and state laws in late 2008, when it solicited PIC II capital from members and concealed the extent of investment losses. The at-risk capital was depleted due to other-than-temporary impairments mere weeks after the ink dried on the issuance.
In addition to RubinBrown, the suit names all dismissed U.S. Central volunteers and executives at the time of conservatorship, including remaining U.S. Central Chief Financial Officer Kathy Brick. The suit does not name the NCUA as a defendant but includes list John Doe defendants, leaving the legal door open to the possibility of adding more defendants.