Lawyers involved in the case said it may well be the largest settlement ever won in a Cobb County court.
Cobb Superior Court Judge Stephen Schuster signed a preliminary order last month that outlines a strategy for paying current and former Cobb Electric Membership Corp. members their portion of "capital credits" that were owed but never paid by the nonprofit electricity co-operative.
Customers doing business with the Marietta-based nonprofit between its founding in 1938 and Dec. 31, 2012, are eligible for the payments. There are an estimated 900,000 such customers.
Cobb EMC serves more than 177,000 residential and commercial customers, also called members, in nine counties - Cobb, Bartow, Cherokee, Fulton and Paulding in the metro Atlanta area and Randolph, Calhoun, Quitman and Clay counties in southwest Georgia.
"These have been difficult negotiations over a problem to which there is no perfect solution," said Chip Nelson, Cobb EMC president and CEO in a news release.
"The court has preliminarily approved the settlement so that we can disburse the required capital credits, close the books on this chapter in our company's history, and put an even stronger focus on our core mission of providing electrical power to our service areas," Nelson said.
What is a 'capital credit'?
At the end of each year, Cobb EMC places its excess revenue in a capital account where it is assigned to the members based on how much electricity they use. The goal is to refund the members this money when Cobb EMC is in the financial position to do so.
The complaint, which was filed by two separate parties - former and current Cobb EMC members - is that Cobb EMC failed to repay its members what they were owed. The original suit was filed Jan. 15, 2010.
How will current and former customers be paid?
In the proposed settlement, Cobb EMC will set aside an estimated $34 million to be paid to account holders that were members up through the first half of 1988, or more than 24 years ago. This is subject to a final approval hearing Feb. 24, 2014, by Schuster.
Upon final approval, these members will be mailed a check for their share of the settlement.
The remaining amount, an estimated $64 million, will be reimbursed to those who joined the co-op between the second half of 1988 and Dec. 31, 2012.
Members will have two options to receive their money. They can be paid the amount based on present-day value now or choose to get paid 100 percent of the payout over the next 24.6 years.
There are about 900,000 members who qualify for the claim. The settlement amount will be paid by the company.
The average payout per member will be determined after claims have been submitted.
How to file a claim?
Garden City Group Inc. of Garden City, N.Y., has been hired to contact members and determine who will want to be included or excluded in the claim. This process is expected to begin in the next few weeks.
Letters will be mailed to members, and a website and phone number will be set up for individuals or businesses to contact for more information or to file claims.
The claim filing period will remain open until Feb. 10, 2014.
Everyone thankful for long-awaited settlement
"It is indeed a new day," said attorney Kevin Moore with the Marietta firm Moore Ingram Johnson & Steele. His father, John Moore, was his co-counsel. They were hired to represent Cobb EMC last September.
"This was an issue and a matter not of this board of directors and not of this management's making but something that they had to deal with," Kevin Moore said. "And that choice was to continue to litigate this case. Cobb EMC had extremely solid and good-founded defenses for this case."
The plaintiffs in the case, both current and former members, were represented by Samuel Pierce Jr. of Roswell; Charles Siegel of Dallas, Texas; Paul Lawrence of Middleburg, Va.; Larry Lahman of Enid, Okla.; and Hylton Dupree and David Cohen of Marietta.
"Early in this process you made the statement that you wanted to see some real money for the members and former members of Cobb EMC," Lawrence said when delivering details of the settlement to Schuster. "And I think we have achieved that in the settlement."