Cobb EMC appeal will likely delay election further
by Brandon Wilson
bwilson@mdjonline.com
December 06, 2009 01:00 AM | 1731 views | 0 0 comments | 10 10 recommendations | email to a friend | print
MARIETTA - The 2009 election of Cobb Electric Membership Corporation directors, which was rescheduled from September to the last Saturday in April 2010, seems likely to be pushed back even further as the cooperative remains tied up in legal sparring with suing customers.

An appeal in the Georgia Court of Appeals regarding bylaw changes is taking longer than expected, and attorneys agree it needs to be resolved before the rescheduled 2009 election of three directors can occur - especially since the appeal revolves around voting procedures established when the co-op changed its bylaws. Around the time the co-op board rescheduled the '09 meeting, EMC attorney Dwight Davis said the board hoped for a decision in December.

But plaintiffs' attorney Pitts Carr said Wednesday that a decision will likely not occur until mid to late spring at the earliest. Court of Appeals clerk Bill Martin said the appeal is a January term case that will be determined between now and July 16. He said Friday that attorneys were still filing briefs. Additionally, the Court of Appeals' decision could be appealed to the Supreme Court, which could create more delays. Calls to EMC spokespeople went unreturned as of press time.

Meanwhile, the postponed '08 election of board members has still not happened, nor has a meeting to hammer out how board directors will be elected going forward.

The postponements and rescheduling are all a result of ongoing litigation in a lawsuit filed in October 2007 by a handful of EMC customers. The lawsuit alleged breach of fiduciary duty, gross mismanagement, waste of corporate assets and unjust enrichment in relation to the management and operations of the co-op and Cobb Energy. During litigation, the '08 election of directors was postponed.

The case was settled a year ago. As a result, Cobb Energy was brought back under the umbrella of the co-op that created it in 1997. Under the settlement, members were to meet and vote on issues of how to elect board directors in the future, followed by the postponed '08 election of directors.

However, days after the settlement, on Dec. 12, 2008, the co-op board made bylaw amendments that changed the way members could vote on issues. Carr believes the bylaw changes were illegal under the settlement, but Superior Court Judge J. Stephen Schuster disagreed - which led to the appeal. The appeal froze the two meetings that were to be conducted as outlined in the settlement, and pushed back the '09 election.

Davis said in early August that if the Court of Appeals reached a decision in December, that would give the co-op enough time to conduct two meetings outlined in the settlement, followed by the '09 meeting.

Meantime, District Attorney Pat Head's investigation into Cobb EMC, President and CEO Dwight Brown, and co-op directors, is ongoing with no updates from the DA's office.

In late April, search warrants were issued and dozens of Georgia Bureau of Investigation agents descended on Cobb EMC's headquarters and the homes of Brown, the co-op's board chairman and two other directors seeking documents, computers and video files that may show evidence of racketeering and theft.
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