KeySpan in Court Over Purchase of New Jersey Construction Firm

NEW YORK CITY-In a court case with more twists and turns than a John Grisham novel, utility monolith KeySpan Corp. is duking it out with the former owners of what is now Roy Kay KeySpan Inc.

Brooklyn-based KeySpan acquired 30-year-old Roy Kay Inc. and its subsidiaries, Roy Kay Mechanical and Roy Kay Electric, in January 2000 for roughly $30 million. According to founder Roy Kay, the complex deal involved up-front cash, a series of installment payments and a performance-based earn-out.

According to court papers filed by Roy Kay and his son David Kay in May, KeySpan intentionally misled them with regard to the terms of a pending merger between KeySpan and another utility company, Eastern Enterprises. The Kays’ lawsuit states KeySpan knew prior to purchasing Roy Kay Inc. that upon completion of the merger Keyspan “would be subject to restrictions on non-energy related business, including general contracting.”