Bristol, Virginia sues BVU over OptiNet sale proceeds

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Federal authorities returned to BVU Wednesday (Image 1)_12063

BRISTOL, Va. (WJHL) — The City of Bristol, Virginia has filed a lawsuit against the BVU Authority claiming that Bristol Virginia Utilities, or BVU, owes the city millions of dollars in proceeds from the 2018 sale of its OptiNet Division.

In the lawsuit, the city claims that BVU “has refused to pay a dime” of the proceeds as it agreed to do.

“The City and BVU previously agreed to split evenly any proceeds from the sale of the OptiNet Division that were left over after paying off the OptiNet Division’s debts,” the lawsuit states. “But years after the parties executed that agreement, and after the BVU had entered into an agreement to sell the OptiNet Division, the BVU retroactively reinstated millions of dollars in internal OptiNet debt supposedly owed to the BVU’s own Electric Division.”

The city claims the debt had been “extinguished” more than a decade earlier, before the city and BVU made their agreement.

“When the OptiNet Division was sold, however, the BVU applied the proceeds to pay off the OptiNet Division’s reinstated internal debt (essentially keeping all the proceeds for itself) and thereby eliminated the net amount to be split with the City, and deprived the City and taxpayer of million of bargained-for dollars,” the lawsuit states.

“When the City and the BVU made their agreement, they understood that there was no internal debt owed from the OptiNet Division to the Electric Division; they made their agreement on that basis. Now, the BVU is requiring the City taxpayers to bear the burden of that supposed internal debt, reinstated years after the agreement, which is a breach of the contract as the parties understood it when executed; at the very least, the retroactive reinstatement of internal debt reflects a mutual mistake of fact as to the financial status of the OptiNet Division, requiring reformation of the agreement. The BVU would be unjustly enriched by any alternative outcome.”

BVU sold its OptiNet Division to Sunset Digital in 2018.

The city has demanded a jury trial and is seeking at least $6,500,000 in compensatory damages.

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