Judge denies motion for partial judgment against TCT

According to an order signed by District Judge Norman Young, a motion for partial summary judgment in a case against Tri-County Telephone Association (TCT) co-operative, filed by Joe and Barbara Campbell, has been denied.

Litigation against TCT and several individual defendants began in December of 2015 by the Campbells, who alleged misrepresentation and concern co-op members were entitled to more than capital credits when the sale happened and should have had more information provided. Additionally, there are allegations the assets of TCT were not properly appraised prior to the sale.

TCT then filed a complaint alleging Joe, a former TCT board member, maintained control of a company laptop he was required to return and took advantage of trade secrets on the computer and shared that information with others.

According to the contentions of the Campbells, the LLC Membership Purchase Agreement between BHT Investments Inc., and Tri-County Telephone dated September 19,2014, and the Definitive Agreement and Plan o fMerger among BHT Holdings, Inc, BHT Merger Corporation, Inc., and Tri-County Telephone Association, Inc., also dated September 19,2014, are void.

More specifically, they contended a member's interest in a cooperative utility can be transferred only within the same household and is otherwise prohibited, a cooperative utility is barred from transitioning to a for-profit corporation as this transaction purported to do, and the statutorily required voting procedures to be conducted upon disposition of a substantial portion of a cooperative utilities property, were not followed or were ignored.

In response, TCT and the other defendants contended the transaction was a merger, and a merger of a cooperative utility is specifically provided for pursuant to Article 11 of the Wyoming Cooperative Utility Act (WCUA). They further contended the meeting and voting requirements of the statutes and the Amendment and Restatement of the Bylaws of Tri-County Telephone Association, Inc., effective May 21, 2011, were complied with.

The Court found there was a legal, statutory framework by which the transaction could occur and therefore the agreements were not void in their inception. Specifically, the Court found that a Wyoming statute provides the statutory authority for the merger of a cooperative utility within an entity other than a cooperative utility, provided certain conditions are met.

The Court further found that the bylaws and Article 11 of the WCUA, provide for the distribution of member owned capital that occurred, and that the procedure utilized by the Board of Directors for the use of mail in ballots to vote to approve or disapproved the proposed merger agreements did not violate the applicable statutory authority and/or the bylaws.

Issues raised by the Campbells concerning irregularities in soliciting votes and the manner in which the votes were obtained, are disputed at this stage. However, the Court is of the opinion that voting at a meeting of the cooperative by mail or by proxy does not make the action approved at the meeting void.