Rick Foley, CEO of Delta Community Credit Union, offered more assurance that the financial institution has a strong legal basis to appeal in the case of a $75 million judgment award involving an alleged breach of contract.
“We’re obviously upset that any amount was granted to the plaintiff, but we are particularly upset by an award of this size. We think it’s unwarranted and contrary to the facts or applicable law. We will file an appeal and believe we have a strong legal basis for doing so,” Foley wrote in a Feb. 1 internal letter to Delta Community employees obtained by Credit Union Times.
According to the attorneys, their client, David R. Pearson, alleged he sustained damages to several of his companies due to the failure of the $4 billion Delta Community in Atlanta to perform under a loan commitment, alleged attempts to prevent Pearson from drawing on a special purpose credit facility and the alleged breach of the contracts.
One of Pearson’s attorneys, Fred Bentley Jr., alleged that one of the issues involved the interpretation of negotiated credit facility contract and the valuation of multiple valuable properties Pearson contributed “as free and clear collateral in return for the loan.” Bentley said, adding that Pearson made all of his payments.
“I continue to believe we acted appropriately and in good faith in this matter. It’s important for us to not get distracted or speculate beyond what we know right now,” Foley wrote. “We believe the judgment will not impact the credit union's ability to continue to meet all of its obligations. Our credit union is well capitalized and has sufficient reserves to cover the cost of the award, if necessary.”