The last official statement the Selectmen made to the public regarding the RIB lawsuit was an announcement of the favorable verdict in the trial back in May. Since then, a lot has happened, and I’ve tried to cover it in the blog. Nevertheless, many people are still under the impression that the town will soon be getting a check for tens of millions of dollars. That could happen, but based on the information that is publicly available, I would say it is unlikely.
The actual lawsuit has been suspended. By mutual consent, the parties have agreed to indefinitely stay further proceedings, including Wolfeboro’s motion for treble damages and costs, which would bring the total award to about $25 million.
Wright-Pierce has hired new lawyers that specialize in appeals. They immediately filed a motion to dismiss for lack of subject matter jurisdiction. Along with this memorandum of law. Basically, they are saying that because Wright-Pierce maintains their home office in Portsmouth New Hampshire, the suit should have been filed in State Court. Lawyers I’ve talked to say that the motion could well succeed on appeal, putting everyone back to square-one. At a minimum, Wolfeboro’s lawyers are saying that responding to the motion will result in substantial additional costs.
In the joint motion to indefinitely stay further proceedings, Wright-Pierce disclosed that their professional liability insurance is “considerably less than the un-multiplied amount” of the original damages claim of $7 million. Moreover, their policy limit includes the amount they spend on legal defense. Wolfeboro has spent in excess of $1.4 million, and it’s reasonable to assume that Wright-Pierce has spent the same to date. So between the two sides, probably $2.8 million has been spent on legal costs. If Wright-Pierce has $3 million in insurance, as has been rumored and is suggested in the motion, there is nothing left. Big surprise that our attorneys agreed to cease activity – the money is running out.
Also disclosed in the trial and in various filings are some hints at Wright-Pierce’s assets. Their annual revenue is around $20 million. They have said that they do not own any of their offices. It’s reasonable to assume that they lease their cars and any substantial equipment as well. Their most valuable asset as a corporation is probably their reputation, which Wolfeboro has spared no expense to destroy with allegations of fraud.
It’s hard to imagine that Wright-Pierce has the will or resources to pay anything close to the awarded damages. Nor does it seem likely that they have the collateral to borrow millions. The joint motion says the parties are in talks to settle. It’s not clear if Wolfeboro is trying to determine how much cash they can get, or if they are considering accepting Wright-Pierce’s original proposal to fix the site.
One thing that’s clear is that the town needs to do something about the situation sooner rather than later. At the diminished flow rate of 180,000 gallons per day claimed at the trial, the storage pond will be full next spring. The ongoing studies of alternative disposal methods would require voter approval and either a cash settlement or bonding to finance. That could take years.
After sitting through 17 days of trial testimony, I believe the problems at the RIB site can be mitigated to serve the town’s needs. If that is an option on the settlement table, we have a right to hear the proposal and to have the reasons for and against discussed in public.