Tuesday, June 30, 2015

Alabama One CU Sues Alabama Public Officials Alleging Conspiracy and Abuse of Power

The soap opera surrounding Alabama One Credit Union (Tuscaloosa, AL) took another turn yesterday.

The credit union, which is currently under an administrative order from its state regulator, filed a federal lawsuit against Alabama public officials, including a state senator and a senior aide to the governor, local attorneys, and others, alleging conspiracy and abuse of power emanating from Gov. Robert Bentley’s office to coerce tens of millions of dollars in legal settlements.

The credit union alleges a conspiracy involving Governor Bentley’s chief legal advisor, David Byrne; State Sen. Gerald H. Allen; the current and former administrators of the Alabama Credit Union Administration, and private attorneys in Tuscaloosa, who allegedly improperly influenced the state officials.

The suit alleges that the public officials grossly abused their power and state positions solely to enrich a political and personal friend – Tuscaloosa plaintiff’s attorney Justice D. “Jay” Smyth, III, who allegedly orchestrated the scheme to pressure and coerce Alabama One into settling five frivolous lawsuits that he and cohorts had filed against the credit union. (read the press release)

In a related story, Credit Union Times is reporting that a former board member of Alabama One CU has filed a class action lawsuit against the credit union seeking the removal of current management. The complaint charged the defendants with violations of state law, breaches of fiduciary duty, waste of corporate assets, conspiracy, and reckless or intentional misrepresentation and suppression of material fact.

Read the complaint.

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