|Sep 16, 2011 4:25 PM EDT|
Laidlaw Energy Group, Inc. Announces Update Regarding the Sale of Its Interest in the Berlin, NH Biomass Facility
Laidlaw Energy Group, Inc. (Ticker “LLEG”) (the “Company”) announced today that Newco Energy, LLC (“Newco”), an affiliate of Cate Street Capital of Portsmouth, New Hampshire, has refused to make a payment of approximately $5,000,000 to Laidlaw BioPower, LLC (“LBP”) that is required under the Purchase and Sale Agreement dated as of August 27, 2010. The Company and LBP consider Newco’s actions unjust and a breach of the express terms of the purchase agreement and a default under the note issued by Newco to LBP. The purchase agreement relates to the sale by LBP of its interest in the 75 megawatt Berlin, New Hampshire biomass-fueled electrical power generating project. The payment to LBP was due contemporaneously with the recent project finance closing for this project which occurred earlier this month. The Company is a member of LBP and is owed approximately 50% of such payment. After certain adjustments, the amount of the payment that the Company should receive is estimated to be between $2,225,000 to $2,375,000. LBP has commenced the dispute resolution procedures provided in the purchase agreement. The Company and LBP believe that Newco does not have a right to withhold such payment and intends to vigorously pursue all remedies available to them, including instituting binding arbitration as provided in the purchase agreement.
The Company is disappointed that Newco has failed to pay LBP amounts due under the purchase agreement and expects that it will ultimately receive its share of all amounts due under the purchase agreement.
About Laidlaw Energy Group
The Company is engaged in the development of independent power plants that generate electricity from renewable resources, with a particular emphasis on biomass power and combined heat and power projects. The Company’s mission is to build and manage a profitable portfolio of generation facilities through the development of new facilities and the acquisition of existing facilities, and in so doing become the leading supplier of biomass power in the United States. The Company is headquartered in New York, New York.