CAIRO — Attorneys for Grady EMC and Tommy A. Rosser Sr. recently filed papers in Grady County Superior Court asking for a judge to dismiss several charges and appoint a litigation review committee for the remaining charges in response to a lawsuit filed last fall by several disgruntled EMC members. They also answered claims made in the lawsuit.

According to the lawsuit, “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. This case also involves the breach of various contractual and fiduciaries duties by the individual defendants.”

The suit was filed by EMC members Gordon Clyatt, Ronald Sellars, C. Seaborn Roddenbery, Jerome J. Ellis and Roy Brock, members of a group called “Take Back our Grady EMC.”

The defendants are Grady EMC, its board, general manager and former general manager.

The defendants’ attorneys asked for the court to entirely dismiss several of the plaintiffs’ claims for failure to state a claim for which relief can be granted.

In claims relating to “patronage capital,” the defendants’ attorneys said that Grady EMC’s Board has “broad discretion to handle patronage capital.” They continued that the plaintiffs are tying to force distribution of patronage capital and that “this request finds no basis in the law.” Basically, the law does not require Grady EMC to disperse the funds in any specific way, “much less on the terms the plaintiffs demand.”

The other claims addressed the management and operation of Grady EMC, including officer salaries, facility renovation, stock purchases of former general manager Rosser Sr. of United National Bank from Grady EMC and then being loaned the money for the stock by the EMC, and several other claims.

For these claims, the defendants asked for the court to appoint an independent litigation review committee. They said that this suit is a “derivative action.”

Derivative actions are often brought by shareholders against corporate directors. A shareholder owns pieces — or shares — of a corporation, but a board of directors elected by the shareholders conducts the corporation’s business. A derivative action is a lawsuit brought by a shareholder on behalf of the corporation against a third party that has harmed the corporation. Typically, this third party is a director who has lost the corporation’s money due to mismanagement. The derivative action allows a shareholder, as a partial owner of the corporation, to enforce the rights of the corporation and allows the corporation to recover funds lost by abuse or mismanagement. In this case though, instead of shareholders, there are EMC members and an electric cooperative rather than a corporation.

As a derivative action, the attorneys argued that a review committee should be appointed to investigate if the pursuit of the legal action is “in the best interest of Grady EMC” and the court should stay this action pending the results of the investigation.

In the “Answer to Plaintiffs’ First Amended and Restated Complaint,” the defendants’ attorneys admitted Rosser Sr. was a founding director of United National Bank before the EMC bought stock in the bank and that EMC sold the stock in 2004 to Rosser and gave him a loan to pay for it. Rosser did not make his scheduled payments on the loan, they admitted, but they did not admit the EMC declared Rosser in default.

They also admitted the EMC gave Rosser Sr. a pay raise over the life of the loan. They admitted Rosser kept his exotic cars in the EMC’s climate-controlled shop “at times” and EMC mechanics worked on the cars.

They also admitted the EMC spent $3.8 million on renovation of the EMC headquarters but deny any wrong-doing.

According to the attorneys’ statement, the EMC also only distributes patronage capital to deceased members but deny that they unjustly enriched themselves.