Aluminum firm is hit with suit
John Stucke - Staff writer
A Seattle law firm specializing in class-action lawsuits has set its sights on Golden Northwest Aluminum Corp., claiming company CEO Brett Wilcox wrongly diverted $285 million netted from electricity sales without sharing the proceeds with employees.
Steve Berman, a principal of Hagens Berman, filed the suit Friday in U.S. District Court in Spokane. Steven Johnson was listed as the lead plaintiff in a case that seeks 200 other plaintiffs.
The suit contends workers at the company's two aluminum smelters in The Dalles, Ore., and Goldendale Wash., were due 20 percent of the money as part of a profit-sharing program.
"The employees don't know what's worse in this case -- that the CEO shuts down a factory and idles hundreds of workers to cash in on the energy contract windfall, or, in their view, to turn around and deprive those same employees out of the profit-sharing from the deal," Berman said in a press release announcing the suit.
Golden Northwest's general counsel and vice president Jerry Miller called the lawsuit a transparent money grab.
"Brett (Wilcox) could have paid the workers, pocketed the rest of the profits and walked away with millions. Did he? No," Miller said Friday afternoon upon learning of the suit. "Instead, he's given everything to try and save about 900 jobs at this company. This whole thing is unfair, unreal and outrageous."
He said the lawsuit would be a colossal failure with few workers willing to join the suit.
Berman accuses Wilcox and Golden Northwest of breaching fiduciary responsibilities.
The complaint alleges that when Golden Northwest decided to resell its allotment of electricity from the Bonneville Power Administration last year, the $285 million in proceeds should have been considered revenues subject to profit sharing.
Instead, the suit claims, Wilcox routed the money into another of his companies called Northwest Energy Development. That firm is using the proceeds to build power plants and provide electricity to the smelters.
Wilcox purchased the smelters in 1996 and signed a labor contract with the United Steelworkers of America Local 8147 that included profit-sharing language.
The suit contends that as Wilcox uses the money on power projects, the smelters are nearing financial collapse.
Indeed, the company in November declared a force majeure on an agreement with Norsk Hydro, unable to fulfill its contract to convert alumina to metal for the European concern.
That was followed by a bondholders lawsuit against Wilcox in December that was eventually settled. Bondholders shared some of the same concerns as Berman's suit: they worried that Wilcox was siphoning money from their smelter investment and routing it to a tightly controlled company independent of the aluminum company.
On Monday, the firm took the lead in a class-action lawsuit against five mining companies in the Silver Valley.