Senior Judge Michael Stoddard, special master for discovery, ordered that Cobb Energy must disclose its list of shareholders of preferred stock. The efforts of Marietta businessman Bo Pounds and former Cobb Commissioner Butch Thompson have been running strong against Cobb Energy in the past few months. They claim that Cobb Energy has “drained assets from the cooperative since its inception and was created to ultimately profit owners of preferred stock, including Brown, President and CEO of both companies“, according to a recent article in the MDJ.
Here’s some more of what Judge Stoddard ordered on Tuesday:
Senior Judge Michael Stoddard, special master for discovery, also ordered disclosure of Energy’s employment agreement with President Dwight Brown, and that all parties return to court next week to show the judge why Energy’s audited ’07 financials should not be made available.
The MDJ article goes on to say:
The orders are part of a lawsuit filed Oct. 22 by members of nonprofit Cobb Electric Membership Corporation. Plaintiffs, led by Marietta businessman Bo Pounds and former Cobb Commissioner Butch Thompson, claim Energy has drained assets from the cooperative since its inception and was created to ultimately profit owners of preferred stock, including Brown, President and CEO of both companies. They also claim the 1997 creation of Energy violated Georgia Law and its 40-year management agreement with the co-op should be nullified.
The more you dig into this, the shady it seems to get. President Dwight Brown is believed to “make roughly $350,000 salary from the for-profit Energy and from the non-profit EMC, giving him a combined salary of about $700,000, not including roughly $60,000 in quarterly dividends he receives on his preferred stock”
Judge Stoddard has ordered all parties to return to the court on October 14th, 9:30am, to “show cause why Cobb Energy should not be required to waive its accountant-client privilege, and why plaintiffs should not be allowed to request the (’07 financial) documents of (accounting firm)BDO Seidman”
The MDJ’s Brandon Wilson goes on to say:
The financial report has also been requested by plaintiffs’ attorneys, including David Cohen of Carr & Palmer, who believes that Energy has cumulative losses of $12.5 million since its inception, and believes that number will increase when the ’07 financials are made available.
Last month in court, Cohen raised the specter of bankruptcy looming over the for-profit subsidiary.
“Although the accountant-client privilege was raised by Cobb Energy, it was not established why that should not be waived by them,” according to Stoddard’s written order. “It was further shown that the report is long overdue, and the accountant, at the request of Cobb Energy, reported to (Stoddard) that a date certain for the release could not presently be established.”
