Pennichuck, CEO deal would include shareholder fund
Part of a settlement between Pennichuck Corp. and Maurice Arel, its former CEO, would include a fund to benefit Pennichuck shareholders, according to Pennichuck’s most recent quarterly financial report.
The proposed fund would benefit all Pennichuck shareholders as of March 31, 2003, except for Arel and the company’s other directors at that date, according to the company’s report, filed with the U.S. Securities and Exchange Commission.
Pennichuck is trying to reach a settlement with Arel as part of an agreement with state and federal securities regulators over various real estate transactions the company made under Arel, who resigned unexpectedly last year. Arel has said that his decision to leave Pennichuck had nothing to do with the investigations.
Don Correll, president and chief executive officer of Pennichuck, declined to say anything about the fund Monday beyond the company’s disclosures, pending the final resolution of the case.
Correll also declined to say when that might be.
The SEC and state Bureau of Securities Regulation are investigating, among other things, why Pennichuck never disclosed Arel’s 1998 purchase of his Nashua home, on which Arel got a discount of between $50,000 and $75,000, according to Pennichuck’s SEC filings.
Any agreement with the securities regulators would involve money paid into a fund for shareholders, a fine paid to the bureau and a payment to defray the bureau’s expenses, according to the publicly traded company’s report to the SEC.
Arel and Pennichuck are also negotiating to determine what amount of the settlement Arel would be responsible for paying, if any.
A settlement with Arel is dependent on a settlement with the regulators, Pennichuck said.
“The company is hopeful that a settlement with the regulators and Mr. Arel will be announced by the end of 2004, but there can be no assurance that a settlement will in fact be reached or that the terms of any such settlement will not differ materially from those described above,” Pennichuck said in the filing.
The bureau and the SEC could also seek to impose fines, penalties or other sanctions upon Pennichuck as a result of their investigations.