DALLAS-A federal bankruptcy court has confirmed an arbitrator's $6.3 million award against Texans CU's wholly owned CUSO to the former owner of the company, once known as Curley Insurance Group.
The bankruptcy court, which has jurisdiction over the case since the September Chapter 11 filing by Texans CUSO Insurance Group, also awarded Kevin Curley attorneys' fees, which will bring the total amount of the award to almost $7 million.
The dispute is one of several problems incurred by the $1.7-billion credit union, which wracked up losses of $44.4 million in 2008, forcing out former CEO David Addison. Curley sold his business to the credit union in January 2007 for $19 million, plus up to $21 million to be paid in three annual earn-out payments calculated by a formula based on the CUSO's earnings and revenue growth, according to court records.
But on April, 27, 2007, less than four months after the deal, Texans fired Curley. Curley appealed the termination to an arbitrator as "without cause," and asked for reinstatement, back pay and benefits. The arbitrator ruled for Curley and issued the $6.2 million award, which represented the first year payout. The two sides were preparing the fight the judgment in state court when the credit union brought the CUSO into bankruptcy, thereby staying the arbitrator's award.
Attorneys for Texans could not be reached for comment.