NEW BRITAIN, Conn.—The former CEO of Sound Credit Union, Edward Fox, is suing the CU and its accounting firm, Whittlesey PC, claiming he was fired after following advice from the CPA group on when to calendar a $1.2-million gain connected to a property sale, Law360 reported.
The complaint was filed in Connecticut Superior Court here.
Fox alleges $130-million Sound Federal Credit Union gave him "stellar" employment reviews but suddenly decided to investigate what it believed were "purported accounting improprieties" with the board-approved sale of a property owned by the credit union on Jesup Road in Westport, Law360 said.
The complaint also says the Norwalk-based credit union blamed Fox for creating a "negative, hostile, and intimidating work environment."
Fox claims both allegations were bogus, Law360 said.
"Despite excellent performance, SFCU decided that a change of leadership was needed, but it wanted to do so on the cheap," he alleges.
Property Sale Proceeds
Fox says he was paid more than $250,000 per year in salary and that his job came with a $1.95 million life insurance policy. He started work on Sept. 9, 2019, and his renewed employment contract was not due to expire until Sept. 30, 2025, Law360 explained.
However, Fox says he was fired on April 30, 2024, because the credit union's board believed he inaccurately placed the Jesup Road property sale proceeds on the institution's 2023 financial books, Law360 said.
The complaint says the sale was scheduled to close at the end of December 2023. Whittlesey deemed it acceptable for the credit union to include the proceeds in its 2023 fiscal calculations, according to the complaint.
The credit union's comptroller and chief financial officers both "blessed" Whittlesey's assessment, according to the complaint.
Fox said any issues surrounding the accounting should be blamed on others, Law360 said.
"Whittlesey specializes in advising such clients as banks, credit unions, closely held businesses, nonprofits, real estate, financial services, manufacturing and distribution, individuals, and more," according to the complaint. "To the extent there was any inaccuracy with respect to accounting matters on the 61 [Jesup Road] transaction, the inaccuracy resulted from Whittlesey's failure to give SFCU and plaintiff proper professional accounting advice,” the complaint states, according to the Law360 report.
Duty Of Care
The complaint alleges that Whittlesey owed a duty of care to the credit union and its officers. Its alleged breach of that duty caused Fox's purported for-cause discharge, according to the complaint.
Whittlesey is accused of one count of negligence, Law360 said.
The complaint further accuses the credit union of breach of contract, failure to pay wages, wrongful termination, defamation, violations of good faith and fair dealing obligations, and violations of the Connecticut Unfair Trade Practices Act, Law360 noted.
The court filing also accuses the credit union's chief financial officer and comptroller of negligence, Law360 said.
Fox's complaint says the Jesup Road property sale positively affected the credit union's financial position and that employees received additional 2023 bonuses because of the deal. He says he did not receive a bump because his bonus was set according to a different calendar, Law360 noted.