BUSINESS ORGANIZATION	12 Months Ended
Dec. 31, 2011
BUSINESS ORGANIZATION [Abstract]
BUSINESS ORGANIZATION	NOTE 1 - BUSINESS ORGANIZATION General Description of Business Central Vermont Public Service Corporation (“we”, “us”, “CVPS” or the “company”) is the largest electric utility in Vermont. We engage principally in the purchase, production, transmission, distribution and sale of electricity. We serve approximately 160,000 customers in 163 of the towns and cities in Vermont. Our Vermont utility operation is our core business. We typically generate most of our revenues through retail electricity sales. We also sell excess power, if any, to third parties in New England and to ISO-NE, the operator of the region's bulk power system and wholesale electricity markets. The resale revenue generated from these sales helps to mitigate our power supply costs. Our wholly owned subsidiaries include C.V. Realty, Inc., East Barnet and CRC. We have equity ownership interests in VYNPC, VELCO, Transco, Maine Yankee, Connecticut Yankee and Yankee Atomic. Pending Merger with Gaz Métro On July 11, 2011, CVPS, Gaz Métro Limited Partnership (“Gaz Métro”) and Danaus Vermont Corp., an indirect wholly owned subsidiary of Gaz Métro (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Upon the terms and subject to the conditions set forth in the Merger Agreement, unanimously approved by the boards of directors of CVPS and Gaz Métro Inc., the general partner of Gaz Métro, Merger Sub will merge with and into CVPS (the “Merger”), with CVPS continuing as the surviving corporation and an indirect wholly owned subsidiary of Gaz Métro. Pursuant to the Merger Agreement, upon the closing of the Merger, each issued and outstanding share of CVPS common stock (other than shares which are held by any wholly owned subsidiary of the Company or in the treasury of the Company or which are held by Gaz Métro or Merger Sub, or any of their respective wholly owned subsidiaries, all of which shall cease to be outstanding and shall be canceled and none of which shall receive any payment with respect thereto, and dissenting shares) will automatically be converted into the right to receive in cash, without interest, $35.25 per share (the “Merger Consideration”), less any applicable withholding taxes. Completion of the Merger is subject to various customary conditions. They include, among others, approval by CVPS shareholders; expiration or termination of the applicable Hart-Scott-Rodino Act waiting period; receipt of all required regulatory approvals from, among others, the FERC and the PSB; and the absence of any governmental action challenging or seeking prohibition of the Merger; and the absence of any material adverse effect with respect to CVPS. Each party's obligation to consummate the Merger is also subject to additional customary conditions including, subject to certain exceptions, the accuracy of the representations and warranties of the other party and performance in all material respects by the other party of its obligations. The Merger Agreement contains certain termination rights for both CVPS and Gaz Métro and further provides that upon termination of the merger agreement under specified circumstances, CVPS may be required to reimburse Gaz Métro the amount of $19.5 million paid to CVPS by Gaz Métro to reimburse CVPS for a termination payment to FortisUS, Inc. in connection with the termination of a prior merger agreement between CVPS and FortisUS, Inc. A party desiring to terminate must provide written notice of termination to the other party. A notice of termination may be provided at any time after July 11, 2012, if regulatory approval has been obtained at that time but the transaction has not closed in accordance with the Agreement, or January 11, 2013, if regulatory approval has not been obtained by the 12-month anniversary of the Merger Agreement and the transaction has not closed by the 18-month anniversary. Regulatory Approvals: On September 2, 2011, CVPS, Danaus Vermont Corp., Northern New England Energy Corporation, for itself and as agent for Gaz Métro and the direct and indirect upstream parents of Gaz Métro, GMP, and Vermont Low Income Trust for Electricity, Inc. filed a petition with the PSB for approval of the proposed merger announced by the companies on July 12, 2011. The PSB established a review schedule, beginning with a workshop held on October 14, 2011 and a public hearing on November 1, 2011. Written testimony and discovery responses have been filed with the PSB and technical hearings are scheduled to begin on March 21, 2012 and are currently expected to end on or before April 4, 2012. The hearing schedule may be delayed or extended, at the discretion of the PSB, and there exists no time limit within which the PSB must issue its decision whether to approve the merger. In addition, we made other regulatory filings seeking approval of the Merger, including with the NRC, the FERC, the Federal Trade Commission, Federal Communications Commission, the Committee on Foreign Investments in the U.S., New York State Public Service Commission, New Hampshire Public Utilities Commission, and the Maine Public Utility Commission. On September 26, 2011, in connection with the Hart Scott-Rodino filing, the Federal Trade Commission granted early termination of the statutory waiting period, which effectively allows us to continue planning for the Merger. On November 22, 2011 we received approvals from the Committee on Foreign Investments in the U.S. and the Maine Public Utility Commission. Also, on November 22, 2011 the New York State Public Service Commission issued a declaratory ruling of no jurisdiction. On March 6, 2012, we received approval from the FERC and on March 7, 2012, we received approval from the Federal Communications Commission for the transfer of control of our radio licenses. Shareholder Approval: On September 29, 2011, CVPS held a Special Meeting of Shareholders (“Special Meeting”), in Rutland, Vermont. At the meeting, the shareholders approved the Agreement and Plan of Merger, effective as of July 11, 2011, and in a non-binding advisory vote approved the change-in-control payments related to the Merger. Over 75 percent of the outstanding shares of the company were represented at the meeting, and of those, more than 97 percent voted in support of the sale. Reimbursement of Termination Fee: On September 29, 2011, as a result of the approval by the company's shareholders of the Merger, Gaz Métro reimbursed CVPS for the full amount of the Fortis Termination Payment of $17.5 million plus expenses of FortisUS Inc. of $2 million. Such reimbursement was required pursuant to the terms of CVPS's Merger Agreement with Gaz Métro. Under the Merger Agreement, CVPS is required to repay the amount of such reimbursement to Gaz Métro in the event the Merger Agreement is terminated because of either the issuance of an order or injunction prohibiting the Merger (other than as a result of the action by a governmental entity with respect to required regulatory approvals) or the breach by CVPS of its representations, warranties or covenants contained in the Merger Agreement. If the Merger Agreement is terminated for any other reason, CVPS is not required to repay such amount to Gaz Métro. While CVPS believes it is unlikely that the Merger Agreement will be terminated on a basis giving rise to a requirement to repay Gaz Métro and, accordingly, believes that the likelihood of such repayment is remote, the final accounting for the reimbursement cannot be determined until the Merger is either completed or terminated. Accordingly, the reimbursement has been recorded as an Other Current Liability until that time. Terminated Merger Agreement with Fortis On May 27, 2011, CVPS, FortisUS Inc., Cedar Acquisition Sub Inc., a direct wholly owned subsidiary of Fortis (“Merger Sub”) and Fortis Inc., the ultimate parent of Fortis (“Ultimate Parent”), entered into an Agreement and Plan of Merger (the “Fortis Merger Agreement”). On July 11, 2011, prior to entering into the Merger Agreement with Gaz Métro, CVPS terminated the Fortis Merger Agreement. In accordance with the Fortis Merger Agreement, on July 12, 2011, CVPS paid FortisUS Inc. $19.5 million (the “Fortis Termination Payment”), consisting of a termination fee of $17.5 million and expenses of FortisUS Inc. of $2 million. These amounts have been recorded as a component of Other Income on the Consolidated Statement of Income in 2011. The Merger Agreement with Gaz Métro required Gaz Métro to reimburse CVPS for its payment of the Fortis Termination Payment immediately following the approval of the Merger Agreement by CVPS shareholders. It also provides that CVPS will be required to pay Gaz Métro the full amount of the Fortis Termination Payment reimbursement if the Merger Agreement is terminated under certain circumstances. Vendor claim: In June 2011, following our announcement of the Fortis Merger Agreement, we received notice of a claim for up to $4.8 million from a former financial advisor, related to the pending merger. We have assessed the claim and do not believe that any amount is owed. In order to resolve the dispute, on December 23, 2011, we filed a declaratory judgment action in the United States District Court for the District of Vermont, seeking a declaration that we do not owe any amount to the vendor. Litigation Related to Merger Agreement On or about June 2, 2011, a lawsuit captioned David Raul v. Lawrence Reilly, et al., Civil Division Docket No. 377-6-11-RDCV, was filed in the Superior Court of Vermont, Rutland Unit against CVPS and members of the CVPS Board of Directors. The lawsuit also named as defendants FortisUS Inc. and one of its affiliates. The Raul complaint, which purported to be brought on behalf of a class consisting of the public stockholders of CVPS, alleged that CVPS's directors breached their fiduciary duties by entering into the Fortis Merger Agreement for a price that is alleged to be unfair, as the result of a process alleged to be unfair and inadequate, with material conflicts of interest and so as to benefit themselves, and including no-solicitation, matching rights and termination fee provisions alleged to be designed to ensure that no competing offers would emerge for CVPS. The Raul complaint also included a claim of aiding and abetting against CVPS and the Fortis entities. The Raul complaint sought, among other things, injunctive relief against the proposed transaction with Fortis as well as other equitable relief, damages and attorneys' fees and costs. On June 23, 2011, following the announcement of an offer received from Gaz Métro, David Raul filed an amended class action complaint repeating his earlier allegations and claims but also referring to this development and claiming that the CVPS Board should terminate the Fortis Merger Agreement and negotiate a new deal with Gaz Métro. On or about June 17, 2011 and June 20, 2011, two additional complaints (Civil Division Docket Nos. 417-6-11-RDCV and 425-6-11-RDCV, respectively) were filed in the Superior Court of Vermont, Rutland Unit, containing claims and allegations similar to those in the original Raul complaint and seeking similar relief on behalf of the same putative class. These complaints were filed, respectively, by IBEW Local 98 Pension Fund and by Adrienne Halberstam, Jacob Halberstam and Sarah Halberstam. On July 13, 2011, a lawsuit captioned Howard Davis v. Central Vermont Public Service, et al., Case No. 5:11-CV-181 was filed in the United States District Court for the District of Vermont against CVPS and members of the CVPS Board of Directors. The lawsuit also named as defendants Gaz Métro Limited Partnership and one of its affiliates. The Davis complaint, which purported to be brought on behalf of a class consisting of the public stockholders of CVPS, alleged that CVPS's directors breached their fiduciary duties by, among other things, allegedly failing to undertake an adequate sales process prior to the Fortis Merger Agreement, entering into the Merger Agreement with Gaz Métro at an unfair price and pursuant to an unfair process, engaging in self-dealing, and by including various “deal protection devices” in the Merger Agreement. The Davis complaint also included a claim for aiding and abetting against CVPS and the Gaz Métro entities. The Davis complaint sought injunctive relief and other equitable relief against the proposed transaction with Gaz Métro, as well as attorneys' fees and costs. On July 22, 2011, the Halberstam plaintiffs in the state case filed an amended complaint in the Vermont Superior Court, Rutland Unit, which added Gaz Métro Limited Partnership and one of its affiliates as defendants in addition to the defendants named in the original complaint. The amended complaint contained claims and allegations similar to those in the Davis complaint and sought similar relief. On August 2, 2011, an Amended Class Action Complaint was filed in the Davis action reiterating the previous claims of breaches of fiduciary duty and adding claims that the Company's proxy materials regarding the Merger are materially misleading and/or incomplete in various respects, in alleged violation of fiduciary duties and the federal securities laws. The Amended Class Action Complaint in the Davis action seeks injunctive and other equitable relief against the proposed transaction with Gaz Métro, damages, and attorneys' fees and costs. On or about August 17, 2011, the three cases pending in the Superior Court of Vermont were consolidated by court order, in accordance with a stipulation that had been filed by the parties. The court also entered orders stating that defendants need only respond to a consolidated amended complaint to be filed, denying a motion for expedited discovery that had been brought by the plaintiffs, and staying all discovery until the legal sufficiency of a consolidated amended complaint could be determined. On August 23, 2011, IBEW moved for leave to file a consolidated amended complaint in the state court proceedings. The proposed consolidated amended complaint contained claims for breach of fiduciary duty against the members of the CVPS Board of Directors in connection with both the Fortis Merger Agreement and the subsequent Gaz Métro Merger Agreement, including claims that the proxy materials provided in connection with the proposed shareholder vote on the Merger were misleading and/or incomplete, and that the CVPS Board had violated its fiduciary duties. The proposed consolidated amended complaint also contained claims for aiding and abetting fiduciary breaches against CVPS and Gaz Métro. The proposed consolidated amended complaint sought, among other relief, an injunction against consummation of the Gaz Métro Merger and damages, including but not limited to damages allegedly resulting from CVPS's payment of a termination fee in connection with the termination of the Fortis Merger Agreement. On September 1, 2011, plaintiff in the Davis action filed a motion seeking a preliminary injunction against the September 29, 2011 shareholder vote that was scheduled in connection with the Merger. On September 16, 2011, defendants in the Davis action filed motions to dismiss the Amended Class Action Complaint. On September 19, 2011, CVPS and the other defendants in the Davis action entered into a memorandum of understanding with the Davis plaintiff regarding an agreed in principle class-wide settlement of the Davis action, subject to court approval. In the memorandum of understanding, the parties agreed that CVPS would make certain disclosures to its shareholders relating to the Merger, in addition to the information contained in the initial Proxy Statement, in exchange for a settlement of all claims. Pursuant to the memorandum of understanding, CVPS subsequently issued a Supplemental Proxy statement that included the additional disclosures. On November 28, 2011, the parties to the Davis action entered into a finalized settlement agreement consistent with the terms of the memorandum of understanding, which was then submitted to the court by the Davis plaintiff together with a request for preliminary approval. The IBEW plaintiff subsequently moved to intervene in the Davis lawsuit for the purpose of objecting to the proposed settlement agreement. On December 21, 2011, the court held a hearing on the request for preliminary approval and on the IBEW's motion to intervene. The request for preliminary approval was denied without prejudice to refile. The IBEW motion to intervene was also denied without prejudice. Meanwhile, a putative class action complaint captioned IBEW Local 98 Pension Fund, Adrienne Halberstam, Jacob Halberstam, Sarah Halberstam, and David Raul v. Central Vermont Public Service, et al., Case No. 5:11-CV-222 was filed in the United States District Court for the District of Vermont against CVPS, Gaz Métro, and members of the CVPS Board of Directors. This federal IBEW complaint, dated September 15, 2011, contained claims of breach of fiduciary duty and inadequate proxy statement disclosures that are substantially similar to those contained in the proposed consolidated amended complaint filed by the same plaintiffs in the Superior Court of Vermont. The federal IBEW complaint also included allegations of violations of the Securities Exchange Act of 1934. Defendants filed motions to dismiss and, on December 7, 2011, the federal IBEW complaint was amended. The amended complaint contains substantially similar claims and allegations. Defendants have moved to dismiss the IBEW amended complaint and briefing on that motion has been completed. On January 12, 2012, the parties to the state court lawsuits filed a stipulation for dismissal without prejudice of those proceedings. On January 24, 2012, the state court entered an order stating that the state court lawsuits would be dismissed without prejudice unless it received a filed objection by January 31, 2012. No such objection was filed.

NOTE 1 - BUSINESS ORGANIZATION

General Description of Business Central Vermont Public Service Corporation (“we”, “us”, “CVPS” or the “company”) is the largest electric utility in Vermont. We engage principally in the purchase, production, transmission, distribution and sale of electricity. We serve approximately 160,000 customers in 163 of the towns and cities in Vermont. Our Vermont utility operation is our core business. We typically generate most of our revenues through retail electricity sales. We also sell excess power, if any, to third parties in New England and to ISO-NE, the operator of the region's bulk power system and wholesale electricity markets. The resale revenue generated from these sales helps to mitigate our power supply costs.

Our wholly owned subsidiaries include C.V. Realty, Inc., East Barnet and CRC. We have equity ownership interests in VYNPC, VELCO, Transco, Maine Yankee, Connecticut Yankee and Yankee Atomic.

Pending Merger with Gaz Métro On July 11, 2011, CVPS, Gaz Métro Limited Partnership (“Gaz Métro”) and Danaus Vermont Corp., an indirect wholly owned subsidiary of Gaz Métro (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”).

Upon the terms and subject to the conditions set forth in the Merger Agreement, unanimously approved by the boards of directors of CVPS and Gaz Métro Inc., the general partner of Gaz Métro, Merger Sub will merge with and into CVPS (the “Merger”), with CVPS continuing as the surviving corporation and an indirect wholly owned subsidiary of Gaz Métro.

Pursuant to the Merger Agreement, upon the closing of the Merger, each issued and outstanding share of CVPS common stock (other than shares which are held by any wholly owned subsidiary of the Company or in the treasury of the Company or which are held by Gaz Métro or Merger Sub, or any of their respective wholly owned subsidiaries, all of which shall cease to be outstanding and shall be canceled and none of which shall receive any payment with respect thereto, and dissenting shares) will automatically be converted into the right to receive in cash, without interest, $35.25 per share (the “Merger Consideration”), less any applicable withholding taxes.

Completion of the Merger is subject to various customary conditions. They include, among others, approval by CVPS shareholders; expiration or termination of the applicable Hart-Scott-Rodino Act waiting period; receipt of all required regulatory approvals from, among others, the FERC and the PSB; and the absence of any governmental action challenging or seeking prohibition of the Merger; and the absence of any material adverse effect with respect to CVPS. Each party's obligation to consummate the Merger is also subject to additional customary conditions including, subject to certain exceptions, the accuracy of the representations and warranties of the other party and performance in all material respects by the other party of its obligations.

The Merger Agreement contains certain termination rights for both CVPS and Gaz Métro and further provides that upon termination of the merger agreement under specified circumstances, CVPS may be required to reimburse Gaz Métro the amount of $19.5 million paid to CVPS by Gaz Métro to reimburse CVPS for a termination payment to FortisUS, Inc. in connection with the termination of a prior merger agreement between CVPS and FortisUS, Inc. A party desiring to terminate must provide written notice of termination to the other party. A notice of termination may be provided at any time after July 11, 2012, if regulatory approval has been obtained at that time but the transaction has not closed in accordance with the Agreement, or January 11, 2013, if regulatory approval has not been obtained by the 12-month anniversary of the Merger Agreement and the transaction has not closed by the 18-month anniversary.

Regulatory Approvals: On September 2, 2011, CVPS, Danaus Vermont Corp., Northern New England Energy Corporation, for itself and as agent for Gaz Métro and the direct and indirect upstream parents of Gaz Métro, GMP, and Vermont Low Income Trust for Electricity, Inc. filed a petition with the PSB for approval of the proposed merger announced by the companies on July 12, 2011. The PSB established a review schedule, beginning with a workshop held on October 14, 2011 and a public hearing on November 1, 2011. Written testimony and discovery responses have been filed with the PSB and technical hearings are scheduled to begin on March 21, 2012 and are currently expected to end on or before April 4, 2012. The hearing schedule may be delayed or extended, at the discretion of the PSB, and there exists no time limit within which the PSB must issue its decision whether to approve the merger.

In addition, we made other regulatory filings seeking approval of the Merger, including with the NRC, the FERC, the Federal Trade Commission, Federal Communications Commission, the Committee on Foreign Investments in the U.S., New York State Public Service Commission, New Hampshire Public Utilities Commission, and the Maine Public Utility Commission. On September 26, 2011, in connection with the Hart Scott-Rodino filing, the Federal Trade Commission granted early termination of the statutory waiting period, which effectively allows us to continue planning for the Merger. On November 22, 2011 we received approvals from the Committee on Foreign Investments in the U.S. and the Maine Public Utility Commission. Also, on November 22, 2011 the New York State Public Service Commission issued a declaratory ruling of no jurisdiction. On March 6, 2012, we received approval from the FERC and on March 7, 2012, we received approval from the Federal Communications Commission for the transfer of control of our radio licenses.

Shareholder Approval: On September 29, 2011, CVPS held a Special Meeting of Shareholders (“Special Meeting”), in Rutland, Vermont. At the meeting, the shareholders approved the Agreement and Plan of Merger, effective as of July 11, 2011, and in a non-binding advisory vote approved the change-in-control payments related to the Merger. Over 75 percent of the outstanding shares of the company were represented at the meeting, and of those, more than 97 percent voted in support of the sale.

Reimbursement of Termination Fee: On September 29, 2011, as a result of the approval by the company's shareholders of the Merger, Gaz Métro reimbursed CVPS for the full amount of the Fortis Termination Payment of $17.5 million plus expenses of FortisUS Inc. of $2 million. Such reimbursement was required pursuant to the terms of CVPS's Merger Agreement with Gaz Métro.

Under the Merger Agreement, CVPS is required to repay the amount of such reimbursement to Gaz Métro in the event the Merger Agreement is terminated because of either the issuance of an order or injunction prohibiting the Merger (other than as a result of the action by a governmental entity with respect to required regulatory approvals) or the breach by CVPS of its representations, warranties or covenants contained in the Merger Agreement. If the Merger Agreement is terminated for any other reason, CVPS is not required to repay such amount to Gaz Métro. While CVPS believes it is unlikely that the Merger Agreement will be terminated on a basis giving rise to a requirement to repay Gaz Métro and, accordingly, believes that the likelihood of such repayment is remote, the final accounting for the reimbursement cannot be determined until the Merger is either completed or terminated. Accordingly, the reimbursement has been recorded as an Other Current Liability until that time.

Terminated Merger Agreement with Fortis On May 27, 2011, CVPS, FortisUS Inc., Cedar Acquisition Sub Inc., a direct wholly owned subsidiary of Fortis (“Merger Sub”) and Fortis Inc., the ultimate parent of Fortis (“Ultimate Parent”), entered into an Agreement and Plan of Merger (the “Fortis Merger Agreement”).

On July 11, 2011, prior to entering into the Merger Agreement with Gaz Métro, CVPS terminated the Fortis Merger Agreement. In accordance with the Fortis Merger Agreement, on July 12, 2011, CVPS paid FortisUS Inc. $19.5 million (the “Fortis Termination Payment”), consisting of a termination fee of $17.5 million and expenses of FortisUS Inc. of $2 million. These amounts have been recorded as a component of Other Income on the Consolidated Statement of Income in 2011. The Merger Agreement with Gaz Métro required Gaz Métro to reimburse CVPS for its payment of the Fortis Termination Payment immediately following the approval of the Merger Agreement by CVPS shareholders. It also provides that CVPS will be required to pay Gaz Métro the full amount of the Fortis Termination Payment reimbursement if the Merger Agreement is terminated under certain circumstances.

Vendor claim: In June 2011, following our announcement of the Fortis Merger Agreement, we received notice of a claim for up to $4.8 million from a former financial advisor, related to the pending merger. We have assessed the claim and do not believe that any amount is owed. In order to resolve the dispute, on December 23, 2011, we filed a declaratory judgment action in the United States District Court for the District of Vermont, seeking a declaration that we do not owe any amount to the vendor.

Litigation Related to Merger Agreement On or about June 2, 2011, a lawsuit captioned David Raul v. Lawrence Reilly, et al., Civil Division Docket No. 377-6-11-RDCV, was filed in the Superior Court of Vermont, Rutland Unit against CVPS and members of the CVPS Board of Directors. The lawsuit also named as defendants FortisUS Inc. and one of its affiliates. The Raul complaint, which purported to be brought on behalf of a class consisting of the public stockholders of CVPS, alleged that CVPS's directors breached their fiduciary duties by entering into the Fortis Merger Agreement for a price that is alleged to be unfair, as the result of a process alleged to be unfair and inadequate, with material conflicts of interest and so as to benefit themselves, and including no-solicitation, matching rights and termination fee provisions alleged to be designed to ensure that no competing offers would emerge for CVPS. The Raul complaint also included a claim of aiding and abetting against CVPS and the Fortis entities. The Raul complaint sought, among other things, injunctive relief against the proposed transaction with Fortis as well as other equitable relief, damages and attorneys' fees and costs. On June 23, 2011, following the announcement of an offer received from Gaz Métro, David Raul filed an amended class action complaint repeating his earlier allegations and claims but also referring to this development and claiming that the CVPS Board should terminate the Fortis Merger Agreement and negotiate a new deal with Gaz Métro.

On or about June 17, 2011 and June 20, 2011, two additional complaints (Civil Division Docket Nos. 417-6-11-RDCV and 425-6-11-RDCV, respectively) were filed in the Superior Court of Vermont, Rutland Unit, containing claims and allegations similar to those in the original Raul complaint and seeking similar relief on behalf of the same putative class. These complaints were filed, respectively, by IBEW Local 98 Pension Fund and by Adrienne Halberstam, Jacob Halberstam and Sarah Halberstam.

On July 13, 2011, a lawsuit captioned Howard Davis v. Central Vermont Public Service, et al., Case No. 5:11-CV-181 was filed in the United States District Court for the District of Vermont against CVPS and members of the CVPS Board of Directors. The lawsuit also named as defendants Gaz Métro Limited Partnership and one of its affiliates. The Davis complaint, which purported to be brought on behalf of a class consisting of the public stockholders of CVPS, alleged that CVPS's directors breached their fiduciary duties by, among other things, allegedly failing to undertake an adequate sales process prior to the Fortis Merger Agreement, entering into the Merger Agreement with Gaz Métro at an unfair price and pursuant to an unfair process, engaging in self-dealing, and by including various “deal protection devices” in the Merger Agreement. The Davis complaint also included a claim for aiding and abetting against CVPS and the Gaz Métro entities. The Davis complaint sought injunctive relief and other equitable relief against the proposed transaction with Gaz Métro, as well as attorneys' fees and costs.

On July 22, 2011, the Halberstam plaintiffs in the state case filed an amended complaint in the Vermont Superior Court, Rutland Unit, which added Gaz Métro Limited Partnership and one of its affiliates as defendants in addition to the defendants named in the original complaint. The amended complaint contained claims and allegations similar to those in the Davis complaint and sought similar relief.

On August 2, 2011, an Amended Class Action Complaint was filed in the Davis action reiterating the previous claims of breaches of fiduciary duty and adding claims that the Company's proxy materials regarding the Merger are materially misleading and/or incomplete in various respects, in alleged violation of fiduciary duties and the federal securities laws. The Amended Class Action Complaint in the Davis action seeks injunctive and other equitable relief against the proposed transaction with Gaz Métro, damages, and attorneys' fees and costs.

On or about August 17, 2011, the three cases pending in the Superior Court of Vermont were consolidated by court order, in accordance with a stipulation that had been filed by the parties. The court also entered orders stating that defendants need only respond to a consolidated amended complaint to be filed, denying a motion for expedited discovery that had been brought by the plaintiffs, and staying all discovery until the legal sufficiency of a consolidated amended complaint could be determined.

On August 23, 2011, IBEW moved for leave to file a consolidated amended complaint in the state court proceedings. The proposed consolidated amended complaint contained claims for breach of fiduciary duty against the members of the CVPS Board of Directors in connection with both the Fortis Merger Agreement and the subsequent Gaz Métro Merger Agreement, including claims that the proxy materials provided in connection with the proposed shareholder vote on the Merger were misleading and/or incomplete, and that the CVPS Board had violated its fiduciary duties. The proposed consolidated amended complaint also contained claims for aiding and abetting fiduciary breaches against CVPS and Gaz Métro. The proposed consolidated amended complaint sought, among other relief, an injunction against consummation of the Gaz Métro Merger and damages, including but not limited to damages allegedly resulting from CVPS's payment of a termination fee in connection with the termination of the Fortis Merger Agreement.

On September 1, 2011, plaintiff in the Davis action filed a motion seeking a preliminary injunction against the September 29, 2011 shareholder vote that was scheduled in connection with the Merger. On September 16, 2011, defendants in the Davis action filed motions to dismiss the Amended Class Action Complaint.

On September 19, 2011, CVPS and the other defendants in the Davis action entered into a memorandum of understanding with the Davis plaintiff regarding an agreed in principle class-wide settlement of the Davis action, subject to court approval. In the memorandum of understanding, the parties agreed that CVPS would make certain disclosures to its shareholders relating to the Merger, in addition to the information contained in the initial Proxy Statement, in exchange for a settlement of all claims. Pursuant to the memorandum of understanding, CVPS subsequently issued a Supplemental Proxy statement that included the additional disclosures. On November 28, 2011, the parties to the Davis action entered into a finalized settlement agreement consistent with the terms of the memorandum of understanding, which was then submitted to the court by the Davis plaintiff together with a request for preliminary approval. The IBEW plaintiff subsequently moved to intervene in the Davis lawsuit for the purpose of objecting to the proposed settlement agreement. On December 21, 2011, the court held a hearing on the request for preliminary approval and on the IBEW's motion to intervene. The request for preliminary approval was denied without prejudice to refile. The IBEW motion to intervene was also denied without prejudice.

Meanwhile, a putative class action complaint captioned IBEW Local 98 Pension Fund, Adrienne Halberstam, Jacob Halberstam, Sarah Halberstam, and David Raul v. Central Vermont Public Service, et al., Case No. 5:11-CV-222 was filed in the United States District Court for the District of Vermont against CVPS, Gaz Métro, and members of the CVPS Board of Directors. This federal IBEW complaint, dated September 15, 2011, contained claims of breach of fiduciary duty and inadequate proxy statement disclosures that are substantially similar to those contained in the proposed consolidated amended complaint filed by the same plaintiffs in the Superior Court of Vermont. The federal IBEW complaint also included allegations of violations of the Securities Exchange Act of 1934. Defendants filed motions to dismiss and, on December 7, 2011, the federal IBEW complaint was amended. The amended complaint contains substantially similar claims and allegations. Defendants have moved to dismiss the IBEW amended complaint and briefing on that motion has been completed.

On January 12, 2012, the parties to the state court lawsuits filed a stipulation for dismissal without prejudice of those proceedings. On January 24, 2012, the state court entered an order stating that the state court lawsuits would be dismissed without prejudice unless it received a filed objection by January 31, 2012. No such objection was filed.