"Con Ed sues Telergy for $14M unpaid bill"
Tuesday, September 11, 2001
By Tim Knauss
"Consolidated Edison, an electric utility that leases valuable rights of way to Telergy in New York City, is suing Telergy for roughly $14 million. The lawsuit - which arrives as Telergy, based in DeWitt, seeks a way out of a financial crisis - is the latest salvo in a feud between Con Ed and Telergy that has endured almost since the two companies started doing business together three years ago. Con Ed filed a complaint Aug. 31 in state Supreme Court in Manhattan claiming Telergy has failed to pay for engineering services, equipment and other items provided by Con Ed for construction of Telergy's fiber-optic network in New York. Con Ed says the unpaid bill stands at $13.8 million, but that it may grow if additional invoices go unpaid.
Con Ed asked the court to validate a mechanic's lien filed against Telergy's New York City franchise and to authorize a foreclosure and sale to pay off Con Ed's claims. Telergy has a franchise from the city authorizing it to build the network on rights of way leased from Con Ed. Telergy officials declined to comment about the dispute but almost certainly will go to great lengths to protect their New YorkCity franchise. They have long described the New York City asset as the "jewel" of their fiber network throughout the Northeast, because of the large amount of national and international traffic routed through Manhattan. In January 1998, Telergy and Con Ed agreed to form a jointly owned telecommunications company called Telergy Metro to build and operate a telecom network along routes leased from Con Ed in New York City. The network, which includes some routes not leased from Con Ed, ties into Telergy's network throughout the Northeast. About six months later, Con Ed relinquished its ownership stake in Telergy Metro but agreed to continue leasing rights of way to the new company.
Con Ed then entered a similar lease with its wholly owned subsidiary, Consolidated Edison Communications - in effect, becoming a competitor to Telergy. In 1999, Telergy began complaining to the state Public Service Commission that Con Ed was delaying Telergy's network construction by responding sluggishly to Telergy's requests for maps, manhole inspections and other services required from Con Ed. In January 2000, Telergy filed a formal complaint with the PSC, accusing Con Ed of favoring its own subsidiary by sabotaging Telergy's efforts. Con Ed consistently denied the charge. At least twice, the PSC has brokered settlements between the companies, only to have them unravel later. As recently as June, the PSC resolved a variety of billing disputes between the companies and ordered them to come to an agreement about a construction schedule that would help Telergy make up lost time.
But now Telergy has other problems.
A month ago, the company abruptly laid off 150 of its 615 employees and requested more operating capital from its lenders. The company's founders, directors and other senior executives all resigned, and crisis manager James Harris of Seneca Financial Group was appointed to run Telergy. Harris said he will unveil a restructuring plan to resolve Telergy's money troubles soon. Friday, he told employees that the plan will come before the end of the month."
Dateline September 11, 2002, eh?! Y'all ever heard this story before?! Me, neither...but this has McAuliffe's fingerprints all over it, and as we dig deeper, I'm sure the Clintons are involved in some way as well!!
Opinions?!
FReegards...MUD
Oooops...that oughtta read "Dateline September 11, 2001."
FReegards...MUD
FGS