Dwight Brown, former CEO of Cobb EMC, is out of the running as the Marietta-based electric cooperative’s next leader. A Cobb Superior Court Judge ruled Friday that rehiring Brown would violate a court-ordered settlement with suing customers.
Cobb EMC sought to rehire Dwight Brown as a non-contract employee. Brown, the co-op’s chief executive, retired Feb. 28 under provisions of the 2008 settlement. Brown was indicted in January on 31 counts of racketeering and theft, but the indictment was dismissed on a technicality.
Since his retirement, Brown has worked as a consultant for the co-op, reporting to its interim CEO. Attorneys for the company argued that Brown was the most qualified candidate, a claim the suing customers denied.
“We thought we had made some very good points in court. Above all we were seeking clarification on whether Mr. Brown could be rehired and the judge has clarified this point,” said Cobb EMC spokesman Sam Kelly in a statement Friday. “Now the board moves forward on two fronts – to fill the CEO position and to the elections.”
In the order Friday, Judge Stephen Schuster had harsh words for the co-op’s leaders, saying the board had been “recalcitrant” in implementing the settlement, and that the settlement allowed the board sufficient time to find a new president and CEO.
“The tenure of [Brown] at Cobb EMC and its subsidiaries ended February 28, 2011. It cannot be renewed, revived or repackaged,” Schuster said in the ruling.
Controversy surrounding Brown’s tenure involved Cobb EMC’s creation of a for-profit side business, Cobb Energy.
In 2007 a group of customers sued the co-op’s board, management and Cobb Energy, following an Atlanta Journal-Constitution story on the arrangement. The lawsuit alleged that Brown and other co-op leaders had unjustly enriched themselves by setting up Cobb Energy and siphoning co-op assets to it.
Friday’s ruling was welcome news to Tripper Sharp, one of the original plaintiffs in the 2007 lawsuit. “The bottom line is Dwight Brown is no longer CEO, and that is fully in compliance with the settlement agreement we agreed to,” he said.
Schuster also ordered all 10 EMC directors to appear in his court Aug. 12 for a compliance hearing on the settlement agreement.
Still to be resolved are elections for new EMC directors. Cobb EMC has not had a board election since its legal troubles began in 2007.
“We will not have any closure on this issue until elections are held for a new board,” Sharp said. “The members need to have their voice in how the (co-op) has been run over the past few years and how it’s being run now. Anything less is unacceptable.”
Earlier this month the Georgia Supreme Court ruled that the EMC’s president and directors violated the settlement agreement by amending its bylaws to allow proxy voting at meetings when the election of directors was not on the agenda. The customers’ attorney, Pitts Carr, plans to file a motion soon to establish a schedule for a meeting and elections as required by the settlement agreement.
Cobb EMC provides power for more than 190,000 customers in Cobb, Bartow, Cherokee, Fulton and Paulding counties.
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