UIL directors sued over lax oversight of transmission line project

As part of an ongoing legal battle with UIL Holdings, a New Rochelle, N.Y.-based construction contractor has filed a lawsuit against the energy holding company, charging that its nine-member board of directors breached their fiduciary responsibility to shareholders.

The lawsuit by North Star Contracting Corp. was filed April 30 in Superior Court in New Haven, according to legal papers obtained by the New Haven Register.

North Star is a shareholder in New Haven-based UIL and contends the board failed to bring in an independent investigator to look into claims of mismanagement associated with UIL’s portion of the Norwalk-to-Middletown transmission line upgrade project that went into operation in late 2008.

This piece of litigation is the latest in a series of legal battles that began in September 2009, when the general contractor for the transmission line project, as well as two subcontractors, sued the United Illuminating Co., a UIL subsidiary.

UI settled two of the lawsuits with the subcontractors in December 2011, but still has one remaining against the unnamed general contractor in addition to this litigation.

The UIL directors named in the lawsuit are: James Torgerson, president and chief executive officer of the company; Thelma Albright, former president of Carter Products division of Carter Wallace Inc.; Arnold Chase, president and board member of Gemini Networks, a telecommunication company and executive vice president of Hartford-based Chase Enterprises, which is focused on real estate investments and owns a 20 percent stake in UIL; Betsy Henley-Cohn, chairwoman of the board of directors and chief executive officer at Joseph Cohn & Son Inc., a North Haven painting and commercial flooring company; Suedeen Kelly, a partner in Patton Boggs L.L.P., an international lobbying firm; John Lahey, president of Quinnipiac University; Daniel Miglio, the former chairman, president and chief executive officer of SNET Corp.; William Murdy, chairman and chief executive officer of Comfort Systems USA, a Houston-based heating, ventilation and cooling system company, and Donald Shassian, executive vice president and chief financial officer of Frontier Communications Corp., a Stamford-based telecommunications company.

North Star issued a written demand to UIL’s board in January, calling on the directors to launch an independent investigation into problems with a 6-mile section of the Middletown-to-Norwalk transmission line that was placed underground in Stratford and Bridgeport, according to legal papers.

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