Corporate America Credit Union won the right to advance to the discovery phase of its case against U.S. Central Federal Credit Union's former directors and executives. U.S. District Court Judge Inge P. Johnson announced March 25 she had set a Dec. 6 trial date to hear the case in Birmingham, Ala.
The $2.2 billion Corporate America claims U.S. Central directors and executives violated the Securities and Exchange Act and state laws when it solicited PIC II capital from members in late 2008 and concealed the extent of its investment losses. The tier-one capital was impaired 100% due to OTTI mere weeks after member corporates converted the funds from existing member capital shares.
In a separate case in which Corporate America alleges similar charges against U.S. Central accounting firm Rubin Brown, Judge Johnson denied the St. Louis firm's right to arbitration, which Rubin Brown appealed. Those charges will either be resolved in arbitration, if Rubin Brown wins the appeal, or it will go to court.