NH Municipalities Sue Local Government Center (LGC), Secretary of State, Over Improperly Retained Surpluses

Several New Hampshire communities filed suit on Monday, August 5, 2013, in Strafford County superior court asking the  court to stop the Local Government Center from distributing insurance refunds pursuant to an order issued by the Secretary of State's Bureau of Securities Regulation.  The Bureau of Securities Regulation found that the LGC had improperly retained $36.3 million dollars contributed by the towns, and illegally retained that amount as surplus funds.

The plaintiff municipalities  are Salem, Peterborough, Durham, Concord, Northfield, Temple, Meredith, Plainfield, Bennington, and Auburn.

"The Order got the basic facts right, but came up with an unfair remedy that is not allowed under New Hampshire  Law," said Chuck Douglas, attorney for the plaintiff towns.  "Instead of returning money to each town based on its contribution, the BSR chose an arbitrary date and used it to determine which towns would get refunds.  It is completely unfair to the towns that paid excess insurance premiums, but were not members of LGC on the date selected in the Order. We are only looking for a fair and rational distribution of the excess funds back to the towns that paid them," Douglas added.

The plaintiff communities are asking the superior court to issue an injunction preventing the LGC from paying refunds based on the BSR's order, while the parties ask the court to review the legality of the proposed distribution as well as claims for breach of contract, breach of fiduciary duty and declaratory judgment. Additionally, the plaintiff communities asked the BSR to review and amend its order so that the refunds would fairly reflect each community's actual contribution to the excess.

Direct Inquiries to: Rick Lehmann

Douglas, Leonard & Garvey, P.C.

(603) 224-1988