Oct. 30, 2013
/PRNewswire/ -- The following statement is being issued by Waters & Kraus, LLP and Complex Law Group, LLC, regarding
In re Cobb EMC Class Action
, Civil Action File No. 10:100353-48.
TO: ALL CURRENT AND FORMER MEMBERS OF COBB ELECTRIC MEMBERSHIP CORPORATION
Please Read this Notice Carefully - It May Affect Your Rights.
This Notice is given pursuant to an Order of the Superior Court of Cobb County, Georgia.
If you have questions please call 1-888-292-8850 or visit www.cobbemcsettlement.com.
YOU ARE HEREBY NOTIFIED that a court has taken the first step in approving the settlement of a class action lawsuit. The parties in the lawsuit
In re Cobb EMC Class Action
, Civil Action File No. 10:100353-48 pending in the Superior Court of
State of Georgia
entered into a Stipulation of Settlement ("Settlement") which was preliminarily approved by the Court on
October 10, 2013
You may have received prior notice or completed forms relating to the years 1957-1971. This Settlement includes all members of Cobb EMC at any time between 1938 and December 31, 2012.
What is This Lawsuit About?
The lawsuit claims that Cobb EMC's prior board and management failed and refused to retire capital credits belonging to former and current members. As a non-profit cooperative, Cobb EMC does not issue stock and does not have shareholders. Instead, Cobb EMC is owned by its members, who hold "capital credits" rather than shares. Members earn capital credits when Cobb EMC's income exceeds its expenses in a given year. The difference is referred to as "margin" and is allocated as capital credits to Cobb EMC's members in proportion to the amount of business each did with the cooperative during the year. Allocated margins are retained and used by an EMC as capital for a number of years, typically between 10 to 30 years, but eventually "retired" in a series of capital credit distributions referred to as a revolving plan. The lawsuit contends that Cobb EMC failed and refused to adopt a reasonable revolving plan or to retire capital credits on a schedule consistent with its obligations. The lawsuit generally alleges causes of action against Cobb EMC for breach of contract, breach of fiduciary duty and declaratory relief. Cobb EMC denies any wrongdoing and the Court has not made a final decision either way. The parties have agreed to resolve this case by Settlement to avoid the time, expense and uncertainty associated with continued litigation, and to provide benefits to former and current members as soon as practical.
Are You Affected? If you were a member of Cobb EMC at any time on or before December 31, 2012, your rights will be affected if the Settlement is approved, whether you act or do not act.
What are the Terms of the Settlement?
If approved, the Settlement provides the following primary benefits to Class Members:
- $98 Million Settlement Fund. Cobb EMC will pay up to $98 million for the benefit of Class Members, including attorneys' fees and expenses of litigation. Class Members will be entitled to receive an immediate cash payment, without any discount, for the capital credits allocated to them through the first half of 1988 (as specified in the Stipulation of Settlement and for all years not already paid); and
- Class Members will additionally be entitled to receive the specified capital credits allocated to them from the second half of 1988 up through December 31, 2012, either in a one-time payment discounted to present value (utilizing a 12% discount rate), or paid out over 24.6 years without discount.
- Cobb EMC will also pay pre-2013 Generation and Transmission Capital Credits if and when Cobb EMC receives payment in cash of such credits. As of December 31, 2012, Cobb EMC had approximately $116 million of G&T Capital Credits allocated to it. Historically, Cobb EMC has not received payment of these credits.
All costs of providing notice and administering the Settlement will be paid by Cobb EMC in addition to the Settlement Fund and will not impact the benefits to Class Members.