The former WesCorp executives being sued by the NCUA over the collapse of the $23 billion California corporate were rebuffed this week in their attempt to get the agency to pay their legal bills.
U.S. District Judge George Wu, in an order filed this week in federal court in Los Angeles, said the defendants – former CEO Robert Siravo, Chief Investment Officer Robert Burrell, Chief Financial Officer Todd Lane, Human Resources Director Thomas Swedberg and Chief Risk Officer Timothy Sidley – have to submit claims for payment to the NCUA after their case with the agency is completed.
That means they would be treated as creditors of WesCorp as the NCUA, as the failed corporate’s liquidator, handles the distribution of the failed corporate’s assets, the judge ruled in denying their motion for payment of their legal fees.
“An advancement or reimbursement order … would directly interfere with the NCUA’s exercise of its powers as a liquidating agent of WesCorp. Instead the Officer Defendants must follow the route of judicial review of the denial of their administrative claims for damages,” Wu wrote in his order.
“Any relief this court might fashion actually ordering the NCUA to pay the Officer Defendants would ‘restrain or affect’ the NCUA’s exercise of its powers,” Wu wrote.
The NCUA and Sidley reached a settlement filed on March 2, while Burrell and the agency apparently struck a deal of their own on Tuesday. Sidley’s settlement – noted in the latest Wu order – said each side would bear their own legal costs and he was hit with a prohibition order from the NCUA, banning him from again working for a federally insured credit union.