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Retained earnings part of takeover cost
Publication year - 1993
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1993.tb06074.x
Subject(s) - lawsuit , earnings , business , charter , payment , franchise , finance , subsidiary , limited company , state (computer science) , law , marketing , political science , algorithm , multinational corporation , computer science
The Edgartown Water Company was a private water company created by state law. The company charter provided that the town of Edgartown could take the corporate property on payment of the “actual cost of the franchise, works and property.” If operation and maintenance costs exceeded the income, the difference was to be added to the “total actual cost,” and vice versa. In 1991, the town exercised its right to take the company. This lawsuit followed to determine the amount the town had to pay the company for the worth of the company. The trial court found that the “total actual cost” was a negative figure of $1.9 million, which obligated the town to pay the company nothing.