When the City of Nashua created three shell corporations to build and manage the Nashua Performing Arts Center, the public was told they were private and therefore off-limits. Private corporations, the argument went, meant private records. Private records meant the public had no right to see how decisions were being made.
But the documents tell a very different story. And the deeper one looks, the more the question becomes unavoidable:
Who was actually in control? Because if they were truly private, their own records should show it. They do not.
$600,000 — and No One in Charge?
Over the past two years, nearly $600,000 in legal fees have been paid to the prominent law firm McLane Middleton in connection with litigation involving the Performing Arts Center corporations. The invoices show top-tier billing rates, up to $650 per hour. But those invoices raise an immediate question.
Why was the City paying the legal bills of supposedly private corporations?
The answer appears in the engagement letters between McLane Middleton and the City. The letters state that the City agreed to pay the legal fees for:
- Richard Lannan, President of all 3 shell corporations
- 201 Main Street Financing Corporation
- 201 Main Street Real Estate Corporation
- NPAC Corporation
The law firm would bill the City of Nashua directly for services performed for the corporations. At the same time, the letters contain an important disclaimer: The City is not the client. The clients, according to the letter, are the corporations. But the structure raises a natural question. If the corporations were the clients, where are the corporate records showing that representation was authorized?
The Paper Trail That Doesn’t Exist
To answer that question, a Right-to-Know request was sent directly to the corporations asking for the basic governance records one would expect any corporation to maintain:
- the engagement agreement retaining McLane Middleton
- approval of the fee structure
- board authorization to retain counsel
- board review or approval of invoices
- any ratification of the legal expenses
The response was startling. The corporations reported that no responsive records exist. No engagement agreements. No board votes. No board authorization. No board review of invoices. Nothing.
That means that for hundreds of thousands of dollars in legal expenses, the supposed corporate clients appear to have no documented record that their own boards ever approved the representation.
The Signature That Isn’t There
The engagement letters themselves contain another unusual detail.
They are signed by the Mayor, but they are not signed by the corporations the lawyers were representing. In other words –The party paying the legal fees signed the engagement letter. The supposed clients did not.
So Who Was Actually Running This?
Whether or not this violates professional rules isn’t the point. The point is control. The Professional Code of Conduct does not require contracts to be signed, but strongly recommends scope and fee agreements: “When the lawyer has not regularly represented the client, the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.” Rule 1.5 Fees (b)
But it raises a critical governance question. If the corporations did not:
- authorize the representation
- approve the engagement
- review the invoices
- approve the legal spending — then who did?
The records strongly suggest that the real control over the legal defense and the spending, sat with the City of Nashua. And that matters for a reason far larger than one lawsuit.
The Courtroom Paradox
Court filings defending the shell corporations introduce another revealing twist.
According to the corporations’ attorneys (paid for by the City) who submitted a pre-trial Memorandum of Law for the 2023 Superior Court Trial, the volunteer board members simply did not know the Right-to-Know law applied to them. They say the City never informed them. They say no one provided training or legal guidance. They say the boards were made up of community volunteers who had no reason to know the law applied.
In other words, the defense is essentially this–The boards did not understand their legal obligations. But that explanation raises an obvious question. The City created the corporations, recruited the board members and paid the lawyers defending the corporations. So if the boards were never told their legal responsibilities…who was supposed to tell them?
And if the lawyers representing the corporations were billing the City hundreds of thousands of dollars, did those lawyers ever formally advise the boards they were defending? No. The record contains no engagement agreements signed by the corporations, no board authorization to retain counsel and no record of the boards approving the legal representation. Yet nearly $600,000 in legal fees were paid. That contradiction sits at the center of the transparency dispute surrounding the Performing Arts Center.
The Lawyer the City Chose
Another unusual feature of the legal defense is who wsa chosen to lead it. The law firm hired to represent the corporations was McLane Middleton, one of the most prominent firms in New Hampshire. The lead attorney on the matter is a former N.H. Attorney General who signed off on the 2019 AG’s Office Memorandum on the Right-to-Know Law. A lawyer with decades of experience at the highest levels of state government who would know the established case law regarding private corporations performing government functions.
Hiring experienced counsel is not unusual for complex litigation. But the structure of the engagement raises a related question.
The corporations themselves appear to have no records showing their boards authroized the retention of that counsel. Instead, the engagement letter was only sent to the City show the City arranged and apid for the representation. The invoices are initialed by Attorney Bolton “SAB” with no sign-off from the Board of Directors of the shell companies.
That arrangement invites a natural question. If the corporations were truly independent private entities, why were the decisions about legal representation apparently made by the City itself? And if the City was directing the defense strategy from the beginning, it raises a broader issue:
Was the legal defense designed primarily to protect the corporations or to protect the City Officials who engaged in malfeasance, unjust enrichment with public money and potential fraud, and who created the shell corporations?
And then a document surfaced that explains how all of this could happen without leaving a paper trail.
Read Part II: The Agreement That Tied It All Together
