By Richard Dean Prudenti
THE MORNING NEWS

BENTONVILLE — A Siloam Springs man has a gripe against Carroll Electric Cooperative, and in filing a lawsuit Wednesday claims the corporation has failed to refund more than $170 million in capital credits to past and present members.

Attorneys for former member Joe Capps filed the lawsuit in Benton County District Court, shortly after 4 p.m. Wednesday. The suit claims Carroll Electric has more than $170 million of "patronage capital" and requests the court order the cooperative to account for capital credits and retire them on a "reasonable and systematic basis."

Carroll Electric is based in Berryville, with an office in Bentonville. The cooperative serves several counties in Arkansas and Missouri.

As a not-for-profit corporation, it cannot earn a profit, according to state and federal laws and the organization's bylaws, the lawsuit reads. Any earnings exceeding operating costs and expenses belong to the patrons, and the cooperative is obligated to pay by credits to a capital account for each patron, the lawsuit claims.

Carroll Electric has not returned revenue to members in cash or in abatement of current charges for electric energy for more than a decade, the suit states.

"As a result of Carroll Electric's interference with the owner's right of control, the owners have been deprived of their property, profits that could have been obtained by the property, and Carroll Electric has been unjustly enriched," according to the lawsuit.  It goes on to say Carroll Electric should be retiring no less than approximately $8 million a year in capital credits, and this "is an indicator that Carroll Electric is hoarding money or wasting assets."

The suit also claims violations of fiduciary duty, shareholder oppression and breach of contract, and Capps seeks recitation, interest, punitive damages, attorneys' fees and other costs.

"The board of directors has irresponsibly endangered the cooperative's tax-exempt status by retaining capital credits indefinitely," the lawsuit states.

The suit also claims the cooperative excessively pays its nine directors. In 2007, each director earned about $2,700 per monthly meeting, for a total compensation of nearly $290,000 to the entire board.

"Overpayment is plain," the lawsuit states.