TUSCALOOSA, Ala.–Alabama One Credit Union, which is being operated in conservatorship by the Alabama Credit Union Administration, has retained the Birmingham, Ala.-based law firm Campbell Guin in its lawsuit against former attorneys for the credit union and real estate appraisers who allegedly contributed to its losses.
According to the Alabama Business Journal, the suit names as defendants former Alabama One Credit Union attorney Paul Toppins, the Frederick firm, the CU’s former independent auditor Hutto & Carver, Green & Co. Real Estate Services, appraisers Richard Malloy and Dick Holley and their companies, and the Dallas-based law firm Loewinsohn Flegle Deary, LLP.
Specifically, Toppins allegedly intentionally made certain misrepresentations to the ACUA and the National Credit Union Administration by e-mail requesting approval of a “proposed settlement” and submitting an unexecuted version of the settlement agreement to the ACUA and NCUA for their review, the Alabama Business Journal reported. The complaint also alleges that the communication of Toppins to the ACUA on behalf of Alabama One on July 18, 2014, constitutes an intentional misrepresentation to the ACUA, as the primary regulatory authority of Alabama One.
Before being placed in conservatorship, Frederick Defendants were defending Alabama One in various matters and also provided additional legal advisory services to Alabama One, and were paid a $15,000 retainer. The ACUA is demanding files regarding work the firm performed for the credit union and the return of the retainer, all of which the current complaint claims were not fully handed over.
In addition, the new litigation alleges that the CU’s former CEO, John Dee Carruth, hired Loewinsohn Flegle Deary, LLP and paid it more than $360,000 for legal services, on the Frederick Firm's recommendation, according to the complaint.
Prior to conservatorship, Alabama One had filed suit against the state regulator, putting the latter in the unique position of being both the defendant and plaintiff in the litigation. The ACUA has since dropped the lawsuit against itself, but Carruth and others formerly associated with the credit union have personally filed suit, including against some very powerful people in the state, among them the governor. All of the litigation is related to loans to a now imprisoned real estate developer and a deal that went sour, as CUToday.info reported here.
Other parties named in the new suit by the ACUA are alleged to have not recognized or identified that “much of Alabama One’s collateral was critically overvalued,” the Alabama Business Journal reported.