CitiCapital Lawsuit Creates Issues for City of Burlington

In a special report, The Burlington Free Press outlines many of the issues facing the city of Burlington, VT that could result from a lawsuit that was filed in the U.S. District Court, District of Vermont by CitiCapital Municipal Finance against the city and its law firm, McNeil, Leddy & Sheahan on September 2, 2011.

Based on the complaint, the lawsuit arises from a lease agreement entered into between Burlington and CitiCapital on a city-wide fiber optic network, operated by Burlington Telecom, in August 2007, encompassing about $33.5 million in equipment cost. CitiCapital says in its complaint it has not received a payment directly from Burlington since November 2009 and seeks relief by requesting an order from the court to enjoin Burlington from using and depreciating its property, directing Burlington to pay holdover rent and require it to de-install and deliver the leased equipment to CitiCapital in accordance with the agreement.

CitiCapital is alleging that as a result of the city’s claimed failure to appropriate funds to support its lease payment obligations, Burlington terminated its agreement with CitiCapital, effective July 1, 2010, but refuses to de-install and return the leased equipment, as expressly provided by the agreement. CitiCapital is claiming that as of August 17, 2011, Burlington will have failed to pay over $3.5 million in payments due under the agreement.

To read the full Burlington Free Press article: click here.

Previously on monitordaily: CitiCapital Files Lawsuit Against City of Burlington, VT, published September 12, 2011

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