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Settlement has $4 million value to Clarke-Mobile Gas Clarke-Mobile Counties Gas District has settled a 10-year-old lawsuit against two companies that has a total value of $4 million to the locally owned natural gas utility. Attorney Mac McCorquodale explained the details of the case at Clarke-Mobile's board meeting in Jackson Tuesday. suit against Prior Energy Corporation and its owner corporation, ICC Industries, had been on-going since 1997. In the settlement, Prior Energy agreed to pay Clarke-Mobile $1.5 million in cash and to waive its right to recover $2.5 million for gas sales and interest. McCorquodale explained that Prior Energy was a natural gas supplier for Clarke-Mobile and it is owned by ICC Industries. "In March of 1997, we discovered that a conspiracy existed between Prior Energy and Clarke Mobile's then manager, Union Gas, to defraud Clarke - Mobile. As a result of the conspiracy, Clarke-Mobile was paying Prior Energy too much for gas. In addition, during some months, Prior Energy was purchasing gas from Clarke-Mobile at a price less than the price Prior Energy was selling gas to Clarke-Mobile for. Prior Energy and ICC Industries also conspired to purchase Union Gas and take over Clarke-Mobile." Some of the same people were involved in Prior Energy and Union Gas. "ICC Industries was handling the secret negotiations and paperwork for the attempted purchase of Union Gas by Prior Energy," McCorquodale continued. "There was a conspiracy among ICC Industries and Prior Energy to defraud Clarke-Mobile. This lawsuit being filed ultimately stopped the purchase of Union by Prior Energy and ICC Industries." Clarke-Mobile had previously sued Union Gas over a management contract that ran from the creation of the utility in 1961 until 2001 with an extension to 2016. The contract called for Union Gas to be paid two percent of Clarke- Mobile's gross income and 50 percent of its net profit. The lawsuit against Union Gas, which was settled in July 1996, eventually helped reveal the setup with Prior Energy. In 1993 alone, Union Gas' management fee was $990,000, McCorquodale explained. Had the contract continued from then until 2016, Union Gas would have realized in excess of over $20 million from Clarke-Mobile Gas. "We believe this is a very favorable settlement for Clarke- Mobile," McCorquodale said of the settlement with Prior Energy. In addition to the financial benefits, McCorquodale added that the municipality-owned utility is now able to do tax exempt financing and to maintain lower rates to better serve industry and to help attract industry to the region. That was not possible when a private management firm controlled the company. The mayors of Grove Hill, Jackson and Thomasville who serve as Clarke-Mobile's directors thanked McCorquodale for his work. "You and your firm [McCorquodale and McCorquodale] desrve a lot of praise," said Jackson Mayor Richard Long. "You were the only lawyer involved with this over the 10 years it has been going on. I wasn't uncomfortable to sit with you facing the seven lawyers from the other side," he said. Thomasville Mayor Sheldon Day agreed. "In recent weeks some things have been said we don't agree with…[but] we appreciate what you do." He said it has made a big difference in what the utility is doing to help the region. He later said the lawsuit settlement would mean a lot to the three owner municipalities. Grove Hill Mayor Lamar Hudson, first elected in 2004, said he hadn't been aware of the case that long but was appreciative of what had been done.
McCorquodale thanked the current and former mayors, Clarke- Mobile employees and Chris Bailey of his firm for their work and support on the case.
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