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Judge Delays Decison On Receivership For SD Consumer Group

Aired 3/15/12 on KPBS News.

A judge postponed a decision on whether to allow San Diego’s largest watchdog – the Utility Consumers Action Network – to dissolve. Two UCAN whistleblowers interpreted the delay as good news.

A judge on Wednesday postponed a decision on whether to allow San Diego’s largest watchdog – the Utility Consumers Action Network – to dissolve.

Lawyers for UCAN had asked Judge John Meyer to put the 30-year-old organization into immediate receivership, similar to what happens in bankruptcy filings. The state judge pushed off a decision until next week to allow all sides more time to prepare. Two former UCAN staffers, who allege that the group’s leader Michael Shames engaged in suspicious financial dealings, oppose receivership. Chris Morris represents the staffers.

“Our clients have taken the position that I think is rightful under the bylaws," Morris said. "There has to be a vote for dissolution and that vote never happened.”

UCAN lawyer Tom Shpall says he cannot answer to what the board does or does not do. He says UCAN has little choice but to disband because the allegations cloud the group’s work. A federal investigation into UCAN is under way.

UCAN lawyers had also asked for a court order to allow the $400,000 deposited with UCAN BY a company called NUCOR TO be transferred to a firm called Death By China Productions.

“That’s a transaction that’s under federal scrutiny right now," Morris said. "And if the board is unwilling to do this final transfer of payment, it’s highly irregular for them to go and ask a court to do it.”

UCAN lawyer Shpall says the judge is being asked basically whether it’s okay to approve the transfer of money from NUCOR through UCAN to Death by China Productions out of caution.

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