At its monthly board meeting on Sept. 11, 2008, the Texland Electric Cooperative board voted unanimously to file a counterclaim against Cattleman’s National Bank. The Texland action is a response to the bank’s previously filed interpleader petition contesting the ownership of a recently discovered non-interest-bearing Texland account held at the bank. Texland’s legal action states that not only is Texland the rightful owner of the account, but the entity is also entitled to lost interest on the account dating back from 1986.
Texland was a 1980s-era joint venture between Pedernales Electric and Bluebonnet Electric Cooperative founded to build coal-fired electric generation plants in Central Texas, but the plan was abandoned after licensing for the plants was denied by the Public Utility Commission of Texas. The organization was discovered to be still active, but was recently reorganized with a new board after the discovery of the bank account.
“The Texland board believes that we are rightfully entitled to recover interest on this Texland account from the day it was established in 1986 to the present,” Texland Treasurer Patrick Cox said at the meeting. “According to our calculations, we are looking at roughly $1 million in interest that we’re seeking to recover, along with court costs.”
The Texland board also agreed to a joint defense agreement with Pedernales Electric and Bluebonnet Electric Cooperative, an arrangement already employed between PEC and Bluebonnet Electric Cooperative. The agreement allows documents exchanged between the member cooperatives and Texland to retain attorney/client privilege; Pedernales Electric and Bluebonnet Electric Cooperative are the sole members of Texland.
In other business at the meeting, Cox also presented information on Texland dating back to 1978. The information was compiled from records assembled by Texland’s two member cooperatives, along with public information gathered by attorneys and staff of PEC and Bluebonnet. The presentation gave an overview of Texland and provided more detail about its related funds, the settlement with the Lower Colorado River Authority and money reimbursed to Bluebonnet and PEC.
Cox also presented a summary of the Texland bank account held at Cattleman’s National Bank. The summary dates from May 1987 to September 1993, showing deposits into and checks drawn from the account. The report also contained a draft financial statement for Texland.
ADD ONE – Texlan files counterclaim against Cattleman’s National Bank
“This shows the transactions that relate specifically to the LCRA settlement with Texland, along with the refund from Shell Oil Company,” Cox explained at the meeting. The data Cox presented is based on information currently available to Texland and could be revised if needed.
Cox also said both the Texland account summary and the historical information had been provided to the legal counsel of the member cooperatives and investigators from Navigant Consulting. Navigant Consulting is conducting a comprehensive, 10-year review of Pedernales Electric business practices.
Pedernales Electric General Manager Juan Garza applauded the Texland action, noting that the two member organizations were working closely together. “Since Texland was originally formed to benefit the members of PEC and Bluebonnet
Electric Cooperative by providing a low-cost source of wholesale electric power, I am gratified to see the new Texland board working to aggressively protect members’ financial interests,” Garza said. “As I have said before, Pedernales Electric will continue to assert its interest in Texland and any related assets in which PEC may have a legitimate interest.”
From DAVID MUNOZ
Publications Editor – Pedernales Electric