<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Earliest Event Reported: May 17, 1995
NEW ENGLAND ELECTRIC SYSTEM
(exact name of registrant as specified in charter)
Massachusetts
(state or other
jurisdiction of
incorporation)<PAGE>
1-3446
(Commission
File No.)<PAGE>
04-1663060
(I.R.S. Employer
Identification No.)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
(508) 389-2000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
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On May 17, 1995, Keystone Shipping Co. (Keystone) filed a
lawsuit against New England Power Company (NEP), a subsidiary of
New England Electric System, in the Commonwealth of Massachusetts
Essex Superior Court. The claim arises out of NEP's charter of
the vessel named SS Energy Independence from Intercoastal Bulk
Carriers, Inc. (IBC), an affiliate of Keystone. The vessel is
used to deliver coal to NEP's power plants. In November 1994,
NEP notified IBC that it was exercising its explicit contractual
right to terminate the charter and purchase the vessel, and that
it was initiating arbitration to resolve any objections to NEP's
exercise of such right. In the arbitration, the panel ruled in
NEP's favor on several preliminary issues. IBC then filed an
appeal from those rulings in federal court, which was dismissed.
The current complaint alleges that NEP induced Keystone to enter
into a 1989 settlement agreement by making fraudulent
misrepresentations about the purchase option. The complaint
alleges damages in excess of $40 million. The complaint includes
allegations that NEP violated Massachusetts General Laws chapter
93A, which provides for the possibility of treble damages. NEP
believes that the allegations are without merit. In addition,
NEP will seek to dismiss the lawsuit because the issues in
dispute are the subject of arbitration. At present, the vessel
remains under the ownership of IBC, and NEP is continuing to pay
the charter rate, subject to NEP's reservation of its rights to
seek damages and other relief against Keystone and IBC.
NEW ENGLAND ELECTRIC SYSTEM
s/Alfred D. Houston
By
Alfred D. Houston
Executive Vice President
and Chief Financial Officer
Date: May 22, 1995
The name "New England Electric System" means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of The
Commonwealth of Massachusetts. Any agreement, obligation or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, officer or agent thereof assumes
or shall be held to any liability therefor.
