Grady EMC sued by members

Published 7:16 pm Tuesday, October 7, 2014

Members of the Take Back Our Grady EMC committee, made up of disgruntled members of Grady Electric Membership Corporation out of Cairo, have filed a class action complaint against Grady EMC, its board of directors, current president and manager Tommy A. Rosser, Jr., and former president and manager Tommy A. Rosser, Sr.

“This case involves the failure of the Grady Electric Membership Corporation and its directors and officers to return profits called ‘capital credits’ to plaintiff members and their class,” the complaint reads. “This case also involves the breach of various contractual and fiduciaries duties by the individual defendants.”

Rosser, Jr., declined to comment on the lawsuit until he had been served. The complaint was filed Tuesday, Oct. 7.

“We filed a complaint just because we want transparency at the EMC,” Gordon Clyatt said. Clyatt is one of the plaintiffs in the case and a founding member of the Take Back Our Grady EMC committee. The other plaintiffs are Ronald Sellars, C. Seaborn Roddenberry, Jerome J. Ellis and Roy Brock.

The complaint states an electric cooperative such as Grady EMC must operate under a non-profit basis, according to Georgia law, and must only spend what it needs to operate.

It continues to allege Grady EMC charges its members more than it needs to operate, resulting in a patronage account of more than $43.5 million. This money is required by Georgia law to be distributed back to its members, which according to the plaintiffs, hasn’t been done in decades.

“Grady EMC has improperly retained such profits and used same to make unauthorized and unreasonable investments, make unauthorized loan(s), and pay excessive compensation to some of its officer and/or employees,” the complaint reads.

The complaint is split into five counts, the first alleging Grady EMC of their misuse of their patronage account.

The second alleges employees of Grady EMC unjustly enriching themselves in a variety of ways, including paying Rosser, Jr., and Rosser, Sr., a “commercially unreasonable and excessive salary and compensation package,” loaning money to Rosser, Sr., in order for him to personally purchase bank stock and allowing Grady EMC employees to work on expensive sports cars owned by Rosser, Sr.

“By unjustly enriching themselves, the individual defendants have reduced the profits of Grady EMC, and therefore, the amount of patronage capital allocated to each defendant,” the complaint reads. “Consequently, plaintiffs seek damages against the individual defendants for whatever amounts they have been unjustly enriched.”

The third count alleges Grady EMC and the other defendants of breaching their fiduciary duties to operate the company on a non-profit basis, to refund its members capital credits and other accusations detailed in count three.

The fourth count alleges Grady EMC of breaching their own contract.

“Defendants’ refusal to operate Grady EMC in a manner consistent with their cooperative principles as promised in their bylaws has directly and proximately harmed all plaintiffs,” the complaint reads.

These bylaws include operating in a manner that’s most beneficial to its members and to operate on a non-profit basis.

Count five states the plaintiffs are entitled to recover from the defendants “reasonable attorney fees.”

The complaint closes with a demand for a jury trial where the plaintiffs and all other members of Grady EMC will be granted equitable relief from the allegations in the first count. Other judgments include awarding the plaintiffs damages for unjust enrichment and granting the plaintiffs the cost of prosecuting the action.

The plaintiffs are being represented by Edward F. Preston of Coleman Talley LLP at Valdosta.