Legal Alert: Patronage Capital Update

Retirement of patronage capital remains a heavily litigated topic. While federal court cases generally have ruled in favor of electric cooperatives, state court cases are somewhat divided. This update reports on a federal court of appeals decision and two recent state court opinions reaching different conclusions about a board’s authority and obligations with respect to patronage capital. Cooperatives facing patronage capital claims should consider whether they can remove the case to federal court under the federal officer removal statute. How a court interprets relevant statutory language is key to understanding a cooperative’s obligations in retiring patronage capital. Similar language can be interpreted to reach very different conclusions. The now-developed body of law on patronage capital may be useful precedent for litigants in future cases. View the full legal alert.

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