Patronage Capital Lawsuits Against Electric Cooperatives on the Rise


In 2009-2010, at least six class action lawsuits have been filed against electric cooperatives over patronage capital (or capital credits). Most are in active litigation. Depending upon the lawsuit, the plaintiffs allege that the cooperative breached its obligations to members and violated state law by:

Failing to retire capital credits altogether; Involuntarily discounting capital credits; Retiring capital credits only upon the death of a member; and Preferring current members over former members in retiring capital credits.

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