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News Now

CU System
Motion filed to dismiss suit vs. WesCorp
LOS ANGELES (11/3/10)--Motions to dismiss the National Credit Union Administration's (NCUA) $6.8 billion lawsuit against directors and officials of Western Corporate FCU were filed Monday by a number of the defendants in the U.S. District Court for the Central District of California, Los Angeles. In the lawsuit, NCUA, as conservator for WesCorp, claims that the former directors and officers of WesCorp did not carry out the duties of their offices with the required level of care in making certain investments before the recession hit the corporate system. In asking the court to reject the suit, the defendants cited a wide variety of grounds that they said supported dismissal at this early stage of the case. The motion filed by the largest group, which consists of all the former directors named in the case plus one former officer, argued that even if everything stated in the complaint was assumed to be true, there would still be no legal violation because the directors and officers made reasonable business judgments in good faith on the basis of the information available at the time. The motion also raises questions about NCUA's own role in the investment decisions made by WesCorp and raises other legal points. Motions filed by other parties support the group motion and also point to the lack of specific allegations in the complaint about those parties or their alleged legal violations. More briefs will be exchanged before the court holds oral argument on these matters, anticipated for Dec. 20. WesCorp was placed into conservatorship March 19, 2009.


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