IN DEFENSE OF OUR CIVIL RIGHTS
Dear Customers and Shareholders,
Last Tuesday, Pennichuck Corporation filed a lawsuit against the city of Nashua, seeking more than $5 million in damages.
We reluctantly took this action after further evaluating the city’s actions of the last two years; reviewing recent Nashua Board of Aldermen discussions and votes as well as the presentations and recommendations of the city’s new consultant and attorney; and the city’s recent petition to the New Hampshire Public Utilities Commission (PUC) to take our assets by eminent domain.
We believe that the city has deprived our company of our civil rights under the
U.S. and New Hampshire Constitutions, including our right to conduct business freely and our right to be free from inappropriate use of governmental power.We believe that the city has grossly abused and is continuing to abuse its eminent domain power in an attempt to:
- Take Pennichuck assets that it knows it has no legal authority to take;
- Freeze our company in a kind of business limbo so that we cannot conduct our normal business operations;
- Coerce our company into accepting the city’s unreasonable demands.
Serious Civil Rights Violations
Four of the six legal claims against the city specifically cite deprivation of civil
rights. Section 1983 of the U.S. Civil Rights law provides the basis of the
city’s liability for depriving our rights. Pennichuck is accusing the city of:
- Blatantly abusing its government authority;
- Intentionally killing a business merger without justification;
- Committing unfair and deceptive business practices;
- Causing significant financial losses to Pennichuck;
- Depriving Pennichuck of its right to be free from inappropriate use of
government power;- Depriving Pennichuck of its freedom to pursue business opportunities;
- Misleading and oppressing the rights of shareholders and prospective investors;
- Taking Pennichuck’s assets without paying just compensation.
As a direct result of these constitutional violations, Pennichuck has incurred and continues to incur substantial damages. These include lost business opportunities, increased operating costs, depressed property values, and other extraordinary fees and expenses amounting to between $5 million and $6 million.
No Option
We want to emphasize that Pennichuck had no option but to take this very serious legal action. This is because:
Pennichuck officers and directors have a legal obligation to protect the vested interests of our customers, employees and shareholders.
We cannot ignore the fact that Nashua's leaders have deliberately deprived
Pennichuck of our civil right to conduct business freely. And we cannot ignore the fact that Nashua’s leaders have caused significant financial damages to Pennichuck for nearly two years.
Because of the seriousness and magnitude of these liabilities, and because the city continues the inappropriate use of government power, Pennichuck is taking the appropriate legal action to recover our losses.
Regrettably, Taxpayers Will Bear the Burden
It is regrettable that Nashua’s taxpayers will most likely have to bear the financial burden created by the unlawful actions of their political leaders. For months now, we have used this forum and others to raise the public’s awareness and understanding of this very issue.
We have explained the financial impact of the city’s actions on taxpayers. We have recounted the potential effect on rates for water customers. We have raised very complex tax and legal issues. We have drawn attention to the city’s disingenuous statements and actions.
And we have made it clear that Pennichuck is committed to protecting the
interests of our customers, employees and shareholders, and to fighting the city’s hostile takeover attempt on every front and to the fullest extent possible.We have also made it clear that our actions do not mean that we are blaming the citizens of Nashua for the irresponsible acts of their leaders.We know from several recent surveys that the majority of Nashua residents now oppose the city taking Pennichuck and strongly oppose the city spending more money on the eminent domain effort.
We obviously share that view and appreciate the support we have received from many people. As New Hampshire’s oldest continuously operating business, we are encouraged by this support as we continue taking the necessary actions to stop the city's misguided and illegal efforts as soon as possible.
The full text of our legal filing is available on our web site (see Municipalization Update).
Pennichuck Corporation
New Hampshire’s Oldest
Continuously Operating Business
April 25, 2004
