Judge upholds ruling against ex-CEO of Cobb EMC

Cobb Superior Court Judge J. Stephen Schuster on Tuesday invalidated a three-year consulting agreement that the co-op terminated after Schuster ruled Brown could not be rehired as the company's CEO. Brown is seeking the $1.8 million outstanding balance of the agreement. Schuster upheld his previous ruling that Brown's tenure with the company ended in February 2011.

Brown retired from the co-op on Feb. 28, 2011, as a provision of a 2008 settlement agreement with a group of co-op customers who sued the utility for operating a for-profit company that unjustly benefited co-op leaders.

“I’m not inclined to flip-flop on my previous ruling,” Schuster said Tuesday. “I previously ruled that the settlement agreement provided for the end of Dwight Brown’s tenure on Feb. 28, 2011.”

Brown’s attorney, David Larsen, declined to comment after the hearing but is likely to appeal the judge’s order.

“Maybe it’s a bad agreement for Cobb EMC, maybe it’s a stupid one, but there is an agreement,” Larsen said during the hearing. “This is not for a court to decide, this is for an arbiter to decide. They may have made a bad deal, but they made a deal.”

The EMC had disputed the contract because the full board never authorized it, and the utility has requested that Brown repay any money he received as part of the consulting agreement.

Both sides had been working out the issues in arbitration until the EMC asked for a court opinion on whether the consulting work was in violation of both Schuster’s order ending Brown’s tenure and the 2008 settlement agreement.

The contract called for Brown to begin consulting March 1 of last year, a day after he retired. He was to be paid $13,800 per week, plus expenses and $5,000 in attorneys' fees.

Tuesday’s civil case follows action in Brown’s criminal case last week when the state Court of Appeals upheld a Cobb Superior Court judge’s ruling that threw out Brown’s first indictment in March 2011 because the indictment was not handed up in open court. Brown was indicted again in July on similar fraud and racketeering charges stemming from the customer lawsuit and is awaiting trial in that case.

While those cases proceed in court, customers are continuing their work to change the co-op, chiefly by electing 10 new members to its board. Four new board members were elected last year, and last week four more were elected. They are Kelly Bodner, Bryan Boyd, Eric Broadwell and Rudy Underwood.

A runoff election is set for April 21 for the remaining two seats. Tripper Sharp, one of the plaintiffs from the customer lawsuit, faces a runoff against Charles Sevier; and Jim Hudson faces a runoff against David McClellan. Sevier and McClellan, who each came in second in their races, have been asked to drop out of the race to save the co-op money from conducting another election.

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