March 28, 2008 10:23 pm
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By Greg Grisolano
ggrisolano@joplinglobe.com
LAMAR, Mo. — Officials of the Barton County Electric Cooperative say they are willing to drop a lawsuit against the co-op’s former CEO if he will pay up the $112,000 he was ordered to hand over in a binding arbitration hearing.
But if he does not, they say they will push the lawsuit, which seeks substantially more money.
Bobbie Jeffries, the co-op’s current chief executive officer, said that’s the message they want former CEO Jim Fanning to hear.
“Barton County agreed in good faith to submit to binding arbitration,” she said. “We expected payment March 6 and haven’t received it. Mr. Fanning is not honoring his agreement.”
Fanning was ordered to repay more than $112,000 to the co-op after a binding arbitration hearing in late January.
The co-op was seeking the return of more than $183,000 after an audit last year stated that nearly $300,000 in member funds were used to pay for improvements to the home of Fanning and his wife, Cheryl.
The co-op’s board of directors initially signed off on a work order for improvements to the home, including a Smart Home technology system, valued at more than $113,000. Several other purchases, including appliances, entertainment equipment, and plumbing and bathroom fixtures, according to records, were invoiced to the co-op by the Fannings.
Board President Douglas Haile said the board held a special meeting on March 6 to decide whether to pursue litigation, and that board members voted unanimously to do so.
“We felt like we had to assure ourselves he’d pay what we’d won,” he said.
When reached for comment Friday, Fanning said he is prepared to repay the co-op in full, on the conditions it will provide his attorney with invoices for the items in question and a release from the suit.
“We’ve got the money to take care of it,” he said. “All we’re asking for is the documents and the release, and we’re ready to go.”
Fanning said he initially offered to make payments to the co-op, but its officials insisted on having the money in lump sum.
“Trying to come up with the money on such short notice, we had to do some things to make it happen,” he said. “I’m not saying it was difficult; we stand ready to pay.”
The suit was filed March 10 in Barton County Circuit Court. A petition filed by Ronald Mitchell, a Joplin attorney representing the co-op, lists five counts against Fanning. Among them are charges that Fanning is in default of the arbitration agreement.
The suit seeks repayment of more than $299,400, plus interest and attorney fees. The suit also requests a lien be put on the Fanning’s home until the debt is repaid.
A forensic audit conducted last year found that Fanning invoiced the co-op for that amount after he made several improvements to his million-dollar home in Lamar.
Records from the Barton County recorder’s office indicate that Fanning’s home already has a $538,400 mortgage and a $175,609 home equity credit line against it. Records also indicate that Fanning has a lien of $305,000 on about 185 acres he owns in rural Barton County, where he operates Dogwood Hill Farm horse ranch.
Last year’s audit
The audit also showed that from 2000 through Jan. 31, 2007, Jim Fanning earned nearly $2.8 million, including bonuses, pension and a severance package. As part of the pension agreement, Fanning’s pension is tax-free because the board agreed to pay roughly $324,000 in income taxes related to the pension. He resigned in January 2007, before the initial audit was conducted.
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