BURLINGTON — A private equity investor informed the city Thursday that he no longer wants to be considered as a potential purchaser of Burlington Telecom.
The mayor and city councilors scrambled this week to see if they could resolve what officials have described as the investor’s potential conflict of interest.
“Since Tuesday we have spent hours together and with other parties exploring whether there is a way in which the fourth bidder could re-enter the BT sales process. The bidder has chosen to remain withdrawn from the process,” said a joint statement issued Thursday by Mayor Miro Weinberger and City Council President Jane Knodell, P-Central District.
City officials have not released the fourth bidder’s identity. Seven Days reported earlier this week that the offer came from Faisal Nisar who runs a private equity firm in New Jersey called ZRF Partners.
Nisar has known Terry Dorman, of the firm Dorman & Fawcett, which manages Burlington Telecom for the city, in a professional capacity for more than a decade, and the two once served together on the board of Massachusetts technology company.
The fact that the two men have worked together professionally is a potential conflict of interest in a competitive bidding process, but as long as city officials were aware of the relationship, it was a conflict that it appears could have been managed.
Weinberger has faced criticism for his initial opposition to making the Burlington Telecom bids public and questions about potential conflicts for Dorman & Fawcett were raised early on.
It appears that, in an effort to avoid allegations of cronyism, Dorman and Weinberger asked Nisar to withdraw his bid.
In an email to the City Council, Weinberger wrote that “in the wake of the legal, regulatory and conflict of interest concerns that have arisen, Terry has requested that [the bidder] withdraw its proposal. I support Terry’s decision and expect there will be further conversation about it in our session this evening.”
That led to a firestorm of criticism from city councilors who said the mayor acted unilaterally to nix a bid that several said was a very appealing offer, calling his actions a serious breach of trust.
Seven Days reports that Nisar’s offer was for $17 million, far less than what two telecommunications companies are offering, but more than the offer from a local co-op.
For more information on the three remaining bids, click here.
The dustup, and resulting scramble to see if Nisar could be brought back into the process, means that the Burlington City Council will delay a vote to winnow the offers down to two finalists.
The vote will take place Oct. 16 instead of Oct. 2, according to a statement from Weinberger and Knodell, further delaying a process that officials hope to complete before the end of the year. If Burlington hasn’t selected a buyer for the fiber network by the end of the year, it will retain a smaller portion of the sale proceeds.
