In Brief


The price of experience Concord chamber victim of alleged fraud The Greater Concord Chamber of Commerce is using the loss of some $11,000 in funds as a learning experience. The money was discovered missing last September, said Timothy Sink, president of the chamber. A subsequent investigation led to the arrest of Donald J. Lord, 37, of Center Barnstead, who worked as an accountant for the chamber. In a letter to chamber members dated Jan. 14, Sink wrote that a “variance in chamber finances” was discovered in mid-September and that the discrepancy was “made up primarily of cash receipts that were never deposited. The loss occurred in various increments over time.” The letter also said that the discrepancy amounted to less than 2 percent of the chamber’s annual operating budget and would probably be covered under the chamber’s dishonesty bond insurance. According to Lt. Walter Carroll of the Concord Police Department, Lord turned himself in Jan. 13. He was released on $20,000 personal recognizance bail. A hearing on the case is scheduled for February. In early September, Sink said, chamber officials began to notice discrepancies between the organization’s deposit report and deposit receipts. “We informed the executive board and had a CPA firm do a spot audit,” he said. That’s when they discovered they were missing “small bits of money, less than $100, over time” totaling $10,800. Sink said he and the chamber board of directors wrote the letter to the members because they felt they “had a duty to notify them.” He said corrective actions have been put in place over and above existing policies including increased checks between paper and computer records as well as an upgrade in the financial software to provide additional security features. They also strengthened their policies on the separation of duties and are continuing to examine internal controls. “We always had a separate person making the deposit, but we never anticipated problems where we were vulnerable,” said Sink. Sink said the chamber would try to turn the negative experience into a positive one. In March, the organization will be offering a workshop in conjunction with the Concord CPA firm of Mason + Rich on the ways businesses can protect their finances from fraud. A union of credit unions St. Mary’s Bank to buy Gateway Manchester-based St. Mary’s Bank Credit Union has announced plans to acquire Gateway Credit Union of Nashua later this year. Under the proposed merger, the assets, operations and members of Gateway will be integrated into St. Mary’s Bank, with Gateway becoming part of St. Mary’s and operating under the St. Mary’s name. The transaction is subject to the parties entering into a definitive agreement, and will require approval by the membership of Nashua-based Gateway Credit Union, the National Credit Union Administration and the New Hampshire Banking Department. Gateway is an 8,000-member credit union operating two branches with locations in Nashua and Hudson. Gateway has $25 million in assets. St. Mary’s has assets of more than $500 million, serves businesses and residents in New Hampshire and has a membership of more than 50,000. Rolande Suchocki, president and treasurer of Gateway, along with the Gateway board of directors, initiated discussions with St. Mary’s, she said. “With the technology that is available today, we don’t have the means to bring in this new technology because we are a small financial institution,” Suchocki said. “Our members deserve the best.” After the acquisition, the combined institution will have seven branches. Ronald J. Rioux, president and CEO of St. Mary’s, said the credit union “will provide an even greater range of financial product offerings” to Gateway members. He said current Gateway members will have access to a more substantial product offering, including free checking with free on-line bill pay services, instant on-line approval for mortgages and access to several St. Mary’s services. St. Mary’s commercial offerings, including on-line services, a range of commercial and industrial loans, SBA loans, Business Finance Authority loans and a Credit Union at Work program, also will be new to Gateway’s business members. Start Up resumes Benson continues his business plan competition Craig Benson may no longer be governor, but he isn’t letting his widely praised Start Up New Hampshire Business Plan Competition fade away. Benson has moved responsibility for the contest out of the governor’s office and into the New Hampshire Advantage Foundation, which Benson is forming to run his programs. Public Service of New Hampshire has again committed the $250,000 in cash for the competition, which is open to any team or company located in or willing to move to the Granite State. “We have the biggest business plan competition in the U.S. We give away more than any other business plan competition,” said Benson, who hailed last year’s event as “hugely successful,” attracting some 212 entrants. The competition brings experts from the venture-capital community together with people in the academic community and builds a network of contacts that business owners or potential business owners may not otherwise get to meet, Benson said. “Even if you lose — if you don’t get a prize — you win, because you get exposure to people that may fund you,” Benson said. “I heard from so many people last year who didn’t win prizes that it was the best thing.” Benson said he plans to be involved “a fair amount” in the competition, along with Babson College entrepreneurship professor Julian Lang; Keith Herman, who was the former governor’s senior adviser; and Jesse Devitte of Borealis Ventures, an early stage venture-capital firm based in Concord and Hanover. “I want to have some involvement, but I don’t want to take it over,” Benson said. “It’s not a one-person show. There are a lot of people who participate.” The deadline for submission for all business plans this year is March 31. Benson’s foundation also will continue to fund his laptop program, which provided 700 free portable computers to teachers, administrators and seventh-graders at six New Hampshire schools. He started the program last January, and funding will continue for the next four years, he said. Water deals Pennichuck buys three N.H. systems Pennichuck Corp. has announced plans to acquire three water systems in the Lakes Region and central New Hampshire — the company’s largest acquisition in almost seven years. Through an agreement with Central Water Co. and Consolidated Water Co. of Moultonborough, Pennichuck will acquire the assets and franchise rights to the Locke Lake water system in Barnstead, the Birch Hill water system in Conway and Sunrise Estates water system in Middleton. The state Public Utilities Commission must approve the sale. After that, the newly acquired water systems will be part of Pennichuck’s Pittsfield Aqueduct Company subsidiary. “This is actually larger than our Pittsfield Aqueduct acquisition,” said Don Correll, Pennichuck president and chief executive officer. The acquisition adds more than 1,100 customers, while Pittsfield resulted in 600, Correll said. Pennichuck had been in talks with the companies for more than two years and moved ahead in those discussions during the last six months, Correll said. The end result was a signed purchase-and-sale agreement. “They finally got comfortable that we’re going to be in business for a while, which was an impediment we had two years ago when things first started with eminent domain,” Correll said. The city of Nashua originally tried to take three subsidiaries of the company — Pennichuck Water Works, Pennichuck East Utility and the Pittsfield Aqueduct Co. — by eminent domain. However, the PUC has ruled that the city cannot acquire Pittsfield Aqueduct Co. and Pennichuck East Utility, which lie outside Nashua. The ruling still allows Nashua to pursue taking Pennichuck Water Works’ assets, which accounts for 80 percent of the company. Whether that takeover will happen will be determined by the PUC. If the city is successful, it plans to allow the Merrimack Valley Regional Water District to manage the utility. Correll said the eminent domain proceedings have been “more than a small distraction,” but that the company has worked hard and is expanding nonetheless. “We’re moving forward, we’re growing, we’re vibrant, we’re expanding our service area,” he said. Correll said the company is “certainly trying to send the message to not only potential customers, but also to existing customers that we’ve been in business a long time, we plan to stay in business, we’re focused on improving our service and expanding our operation.” Enterasys settles Cabletron shareholder suit Andover, Mass.-based Enterasys Networks Inc., maker of routers and switches for corporate networks, has agreed to pay $10.5 million to settle shareholder litigation filed against its predecessor company, Cabletron Systems Inc., and certain Cabletron directors and officers. The company said the settlement of the 1997 suit, which is subject to a final agreement and subsequent court approval, does not admit any wrongdoing by the defendants. Enterasys expects all but about $500,000 of the settlement amount to be recovered from proceeds of insurance policies. It also will record a $500,000 charge in the fourth quarter. “We are very pleased to be putting this matter behind the company with minimal financial impact,” said William O’Brien, chief executive officer of Enterasys. The settlement resolves all claims made in nine class action lawsuits originally filed in 1997 in U.S. District Court in Concord against Cabletron and various individuals, including then-CEO Craig Benson, co-founder of the company. The litigation does not involve any current executives of Enterasys. Enterasys is one of a few remaining successors to Cabletron Systems Inc., founded in 1983 by Benson and Robert Levine in Levine’s Massachusetts garage. The company moved to Rochester a few years later. By 1997, Cabletron was one of New Hampshire’s largest private employers. A group of shareholders brought a class action lawsuit against Cabletron, Benson, Levine and other company officials in 1997. They alleged that Cabletron overstated its sales and withheld shortcomings of its new products to inflate stock prices long enough for top executives to unload their stock at top dollar.
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