By Marcus E. Howard
Marietta Daily Journal Staff Writer
MARIETTA - Cobb Superior Court Judge Stephen Schuster ordered the sealing of a report by a special litigation committee appointed by Cobb Electric Membership Corporation in the midst of its ongoing legal battle against it and its for-profit affiliate, Cobb Energy, by a group of plaintiffs accusing them of wrongdoing.
During a hearing Monday, Schuster said he will keep the report's findings sealed from public view until July 21, when attorneys on both sides can make their appeal as to whether it should be unsealed or not.
The sealing of the report was made at the request of the special litigation committee.
Cobb EMC's Board of Directors formed the committee last October, after allegations against it were made; the board said it did so in keeping with good corporate governance practices.
In a resolution passed by the board on Oct. 18, the committee was given responsibility for "independently reviewing and investigating all of the allegations" contained in recent lawsuits and reporting their findings back to the board.
On Monday, during a general overview of the report, committee lawyer Tom Cauthorn, a former Cobb Superior Court judge, said Cobb EMC's directors relied on the advice of legal experts when they decided to form the for-profit Cobb Energy.
"The facts do not cease to exist because they are ignored," said Cauthorn. "The Cobb EMC's creation of Cobb Energy in response to deregulation and reliance on the advice of legal counsel did not disappear, even though the plantiffs' experts ignore them."
In the lawsuit filed last October by six plaintiffs, Cobb EMC, Cobb Energy, Dwight Brown - who is president and CEO of both - and eight of 10 elected Cobb EMC board members are accused of wrongdoing in their operation of the two companies. Marietta businessman Bo Pounds and former Cobb Commissioner Butch Thompson are among the plaintiffs.
The suit, which argues that the board broke state law, includes allegations of breaches of fiduciary duties, abuse of control, gross mismanagement, waste of corporate assets, unjust enrichment and violations of the Georgia Electric Membership Corporation Act.
According to Cobb EMC's 2007 annual report, the corporation owns 30.24 percent of Cobb Energy and 100 percent of Gas South. Cobb EMC's 200,000 residential and commercial customers own the electric cooperative.
Cobb EMC runs appoximately 100 miles of power lines in Cobb, Bartow, Cherokee, Fulton and Paulding counties in the north metro-Atlanta area and in Randolph, Calhoun, Quitman and Clay counties in southwest Georgia. It's one of the largest of Georgia's 42 EMCs and is among the largest of the nation's approximately 900 EMCs, according to EMCs of Georgia.
mhoward@mdjonline.com
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For a more detailed report on what was revealed from the committee's recommendations read the AJC's article.
THIS IS NONSENCE YOU GUY GOT NOTHING BETTER TO WORRY ABOUT LIKE GAS PRICES YOU STINK!
What Cobb EMC officers, directors, lawyers and CPA's did is the same as a family member stealing from the family business!!! All of these people above and the former politicians/lawyers now associated with the cover up should be ashamed. Where is the DOJ who would be after a private corp under RICO and mail fruad????? Why are individuals forced to initiate litigation to correct a huge disservice to the general public by a "quasi" regulated industry. Cobb EMC can also stop sending the cover up propoganda in the mail. Do they think the 'quiet majority' of subscribers are idiots?? This needs to get corrected quickly, many of the existing officers/directors removed, and move forward as a true 'member' coop should.
It is a travesty that the Brown family has been self-enriching through our power monopoly while some of our senior citizens have had to manage without necessities and air conditioning because of the higher rates. We want our money back and a new chairman.