Judge to hear Cobb EMC deal Tuesday

A judge is scheduled Tuesday to hear testimony, and will probably rule, on a settlement deal between Cobb EMC and its customers. They sued the Marietta-based co-op in October 2007, saying an operating agreement between the co-op and a for-profit affiliate, Cobb Energy, had siphoned co-op assets and enriched insiders. Here’s what’s on the table, including an accounting firm’s estimates of what it will cost Cobb EMC to regain control of its business and what it will get in return. All except totals are rounded.

Cobb EMC gets…

• Termination of remaining 30 years of operating agreement with Cobb Energy: $46.5 million*
• Return of all electric meters: $18.9 million
• Ownership of computer, software and billing system: $20 million
• Naming rights agreement for Cobb Energy Performing Arts Centre: $11.7 million
• ProCore Solutions LLC, a profitable call center business now under Cobb Energy: $15 million
• Sale of other Cobb Energy subsidiaries less debt: Unknown
• Total: $112,207,000

Cobb EMC pays…

• Purchase of Cobb Energy preferred and remaining common stock: $12.1 million
• Balance on line of credit with co-op bank: $18.8 million
• Forgiven line of credit with Cobb EMC: $12.9 million
• Pension liability and long-term benefits: $3.3 million
• Total: $47,100,000

• Difference: $65,107,000

LEGAL BILLS

• Requested by plaintiffs’ attorneys**
• Fees: $6.5 million
• Expenses: $132,114
• Note: Billings by attorneys for Cobb EMC, Cobb Energy, board members and executives are not known.

*net present value

**Likely would be paid from insurance; require judge’s approval

Sources: court documents