Laserfiche WebLink
<br />3002 <br /> <br />interest and failed. This attempt to sell may have set the stage for the 1991 offer by the Colorado <br />Water Supply Company. <br /> <br />In December 1991, Colorado Water Supply Company (CWS), submitted an offer to shareholders <br />of the Ft. Lyon Canal Company for the purchase of their shares. CWS is a sister company to <br />Colorado Interstate Gas Company and a subsidiary of Coastal Corporation of Houston, Texas. CWS <br />desired to purchase at least a controlling 51 % interest in the company. The offer was a 43 page <br />contract accompanied by 118 pages of exhibits, including escrow instructions, easements, deeds and <br />assignments, covenants, proxies and lienholder's consents. In February, 1992, CWS tendered 19 <br />pages of modifications to the contract and exhibits. <br /> <br />The deadline for shareholders acceptance was January 13, 1992; after the request of Colorado <br />Governor Roy Romer for additional time to consider the impacts of the proposal, the deadline was <br />extended toMarch 6,1992. On March 13, 1992, CWS announced that this plan to acquire the water <br />was being suspended. CWS never announced what percentage of the shares had been acquired; <br />however, the number was clearly less than the 51% sought. The CWS plan was controversial, <br />spawning statewide press coverage, intervention by the Colorado Governor, legislative proposals, <br />local government task forces, and state administrative agency studies! <br /> <br />The offer documents were difficult for the potential sellers and their representatives to understand <br />and evaluate. The apparent purchase price was $2228 per share (Master Contract, 1991, Section 3) <br />with closing within 90 days (Section 28) of completion of certain conditions (Section 26). In <br />summary, the conditions and requirements included: <br /> <br />a. A reliable yield of 1.1 acre feet after water court transfer and water treatment <br />processes <br />b. A water court decree without conditions that would delay the project or increase the <br />project costs <br />c. Receipt of all necessary government permits, and <br />d. Completion of 90 percent of any revegetation. <br /> <br />(A more complete explanation of the conditions is included in Appendix 2.1): <br /> <br />Ft. Lyon shareholders voiced a number of concerns with the CWS contract. These included loss of <br />control of the management of the company, lack of consideration of well rights (dealt with in the <br />proposed contract amendment), long term encumbrance of the shares during the contract, <br /> <br />3 Refer to newspaper articles: Denver Post, February 23,1992, c-1; Pueblo Chieftain, February 27, 1992; Westword <br />15(26) 10; Arkansas Valley Journal, March 3, 1992; Colorado Springs Gazette Telegraph, February 24, 1992; Rocky <br />Mountain News, March 14, 1992. <br /> <br />2-4 <br />