By the OGJ Online
HOUSTON, Mar. 12�Northeast Utilities Monday said it filed suit in US District Court for the Southern District of New York against Consolidated Edison Inc. seeking damages in excess of $1 billion arising from Con Edison's alleged breach of an October 1999 agreement.
Hartford, Conn.-based Northeast Utilities claimed Con Edison breached the $7.5 billion agreement, after the New York company said it was unwilling to close the pending acquisition of Northeast on the previously agreed upon terms.
Con Edison filed suit Mar. 6 in federal court suit seeking a declaratory judgment that Northeast Utilities failed to meet the conditions of the merger agreement. Con Edison also wants the court to rule it has no further obligations under the 16-month-old agreement. It said Northeast Utilities violations "include, among other things, uncovered supply obligations'' incurred by Northeast's unregulated subsidiary Select Energy.
Commenting on a Con Ed's allegations, Northeast Utilities Chairman Michael Morris said the company has always has been in full compliance with the terms of the merger agreement, and the company is more valuable today than at the time of the merger agreement.
He said Con Edison had no legal basis for refusing to complete the merger at the agreed upon terms. In its lawsuit, Northeast is seeking monetary damages for, among other things, the loss of the acquisition premium and for time, money, and other resources expended in seeking approval of the merger. Northeast also said it was required to forego business opportunities due to the restrictions the agreement placed on the operation of its businesses.
Con Edison did not immediately comment on Northeast's suit.
