Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
LEHI, Utah (AP) -- Since Lehi Irrigation said a month ago it would return 58 water shares sold -- allegedly illegally -- at a January auction, just 15 have been returned and other shareholders are upset.
"I'm a little impatient, I guess. I think it's time they did something," Illa Pulley of American Fork said. She's still waiting to get the record of her father's share.
Lehi Irrigation's attorneys said June 16 that the Jan. 9 auction was illegal. The firm, Mabey & Wright of Salt Lake City, said 58 shares would be restored to their previous owners once delinquencies were paid. The people who bought the shares at the auction -- many board members and family of the board -- were given refunds.
Lehi Irrigation attorney David Wright said in June that the return process should only take a few days, except for cases in which the auctioned shares were sold again.
Evan Johnson, a water trader, hand-delivered the delinquency of $144 for his share after the reversal was announced.
"We turned our certificate in to the secretary, and we paid the back assessments, but we have not been given a certificate," he said.
Johnson and business partner Jim Garside filed a lawsuit against Lehi Irrigation on June 1, but waited to serve it, hoping to simply have the water right restored.
The process becomes complicated because it's been seven months since the auction, and the shares have changed hands.
"A lot of the shares that were sold at the auction have been sold to the city (Lehi)," Wright said.
The shares could have been sold to developers, who then have to give the city enough water for their development. In Lehi and the surrounding areas, a lot of that is done through Lehi Irrigation's water shares.
According to Utah's constitution, cities and towns cannot give up water rights, no matter if they were obtained illegally, City Attorney Kenneth Rushton said.
Salt Lake attorney Daniel Jensen said it is not entirely clear if shares of stock are considered in that provision.
Because of the constitutional provision, the company plans to replace the shares by buying other shares that are for sale and giving them to the shareholders. The company will be using insurance money and company funds for the purchases.
"We think we can round up enough shares to fill whatever hole needs to be filled in getting these shares back to the original shareholders," Wright said.
He said it could take months for everything to be restored.
Meanwhile, some of the people who bought shares at the auction at well below the shares' value, do not want to return them.
"Some of these people have hired attorneys and they want to put up a fight, but we've told them that they need to be returned," Wright said.
------
Information from: The Daily Herald, http://www.heraldextra.com
(Copyright 2006 by The Associated Press. All Rights Reserved.)
