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Washington
Judge dismisses suit against former WesCorp directors
LOS ANGELES (7/29/11)—A federal district court judge has granted a motion to dismiss the case brought by the National Credit Union Administration (NCUA) against Western Corporate FCU’s former directors. U.S. District Court Judge George Wu this week dismissed complaints by the NCUA that alleged breach of fiduciary duties against WesCorp’s former directors. The suit had named former directors Bill Cheney(president/CEO of the Credit Union National Association), Gordon Dames, Robert Harvey, James Jordan, Timothy Kramer, Robin Lentz, John Merlo, Warren Nakamura, Brian Osberg, David Rhamey and Sharon Updike. However, the judge has denied a request by the failed corporate’s officers to dismiss separate charges against them. The NCUA suit names Robert A. Siravo (WesCorp's former president/CEO), Todd M. Lane (former chief financial officer), Thomas E. Swedberg (former vice president, human resources), and Bob Burrell (former chief investment officer) and alleges breaches of fiduciary duties. The NCUA has further alleged Siravo and Swedberg manipulated the WesCorp’s Supplemental Executive Retirement Plans (SERP) to increase pay-outs and that Lane was "enriched" by executing an early payout agreement in exchange for his SERP rights. The NCUA brought its lawsuits against the officers and directors in its role of conservator for Wescorp. The suit against the officers will continue to proceed toward trial, although the judge, in oral comments, did raise some concerns and questions about the NCUA's case against the officers as well. The next step is the “discovery” phase, through which each side gathers additional evidence. Wu has set a scheduling conference for Aug. 25.


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