Commerce Energy Group Reports Receipt of Demand for Arbitration From ACN
March 02 2006 - 4:15PM
PR Newswire (US)
COSTA MESA, Calif., March 2 /PRNewswire-FirstCall/ -- Commerce
Energy Group, Inc. (AMEX:EGR), a leading U.S. electricity and
natural gas marketing company, today announced that it received a
notice of Demand for Arbitration relating to the Sales Agency
Agreement between American Communications Network ("ACN") and
Commonwealth Energy Corporation (currently, Commerce Energy, Inc.,
("Commerce") a wholly-owned subsidiary of Commerce Energy, Group,
Inc. (the "Company")), which ACN terminated, effective February 9,
2006. Under the Sales Agency Agreement, ACN had provided to
Commerce the services of its network of independent sales
representatives to sell Commerce's electric commodity and natural
gas products and related services. As a result of ACN's termination
of the Agreement, ACN's sales network ceased offering any of
Commerce's products on February 9, 2006. When ACN terminated the
Sales Agency Agreement, the Company believed that any obligation to
pay future commissions to ACN was also terminated. Recently,
attorneys for ACN delivered to the Company a Demand for Arbitration
between ACN and Commerce alleging that Commerce is liable for more
than $32,286,564 in actual and consequential damages and more than
$6,776,009 in restitution on a variety of causes of action with
respect to alleged future commissions arising after the termination
of the Sales Agency Agreement, as well as more than $45,395,438 in
punitive damages. These alleged damages include a claim for more
than $32,286,564 for alleged "anticipatory breach of contract,"
even though ACN acted to terminate the Sales Agency Agreement on
its own. ACN's Demand for Arbitration does not provide any
calculations or factual support underlying these figures. "We
believe ACN's claims are outrageous, and we do not believe Commerce
is liable at all to ACN, let alone for alleged future damages under
a contract that ACN unilaterally decided to terminate," said Steven
S. Boss, the Company's Chief Executive Officer. The Company
believes that the ACN's claims are without merit and intends to
vigorously contest them in arbitration. The Company is also
investigating counterclaims it may have against ACN. About Commerce
Energy Group, Inc. Commerce Energy Group, Inc. (AMEX:EGR) is a
leading independent U.S. electricity and natural gas marketing
company, operating through its wholly-owned subsidiaries, Commerce
Energy, Inc. and Skipping Stone, Inc. Commerce Energy, Inc. is a
FERC-licensed unregulated retail marketer of natural gas and
electricity to homeowners, commercial and industrial consumers and
institutional customers operating in nine states. Skipping Stone is
an energy consulting firm serving utilities, pipelines, merchant
trading and technology companies. For more information, visit
http://www.commerceenergygroup.com/. Forward-Looking Statements
Except for historical information contained in this release,
statements in this release, including those of Mr. Boss, may
constitute forward-looking statements regarding the company's
assumptions, projections, expectations, targets, intentions or
beliefs about future events. Words or phrases such as
"anticipates," "believes," "estimates," "expects," "intends,"
"plans," "predicts," "projects," "targets," "will likely result,"
"will continue," "may," "could" or similar expressions identify
forward-looking statements. Forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties, which could cause actual results or outcomes to
differ materially from those expressed. Commerce Energy cautions
that while such statements are made in good faith and the company
believes such statements are based upon reasonable assumptions,
including without limitation, management's examination of
historical operating trends, data contained in records, and other
data available from third parties, the company cannot assure that
it projections will be achieved. In addition to other factors and
matters discussed from time to time in our filings with the U.S.
Securities and Exchange Commission, or the SEC, some important
factors that could cause actual results or outcomes for Commerce
Energy Group, Inc. or its subsidiaries to differ materially from
those discussed in forward-looking statements include: the
uncertainties of litigation, arbitration or other dispute
resolution procedures, the volatility of the energy market,
competition, operating hazards, uninsured risks, failure of
performance by suppliers and transmitters, changes in general
economic conditions, seasonal weather or force majeure events that
adversely effect electricity or natural gas supply or
infrastructure, increased or unexpected competition, adverse state
or federal legislation or regulation or adverse determinations by
regulators, including failure to obtain regulatory approvals. Any
forward-looking statement speaks only as of the date on which such
statement is made, and, except as required by law, Commerce Energy
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not
possible for management to predict all such factors. DATASOURCE:
Commerce Energy Group, Inc. CONTACT: Investor Relations of Commerce
Energy Group, Inc., +1-800-962-4655, ; or Cecilia Wilkinson, , or
Wade Huckabee, , both of PondelWilkinson Inc., +1-310-279-5980, for
Commerce Energy Group, Inc. Web site:
http://www.commerceenergygroup.com/
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