07 May News: Cadiz to Vigorously Defend Against Baseless Securities Litigation
CONTINUING TO PROGRESS ENVIRONMENTALLY BENIGN WATER PROJECT IMPLEMENTATION
(05.07.15) — On April 24, 2015, a putative class action lawsuit, entitled Van Wingerden v. Cadiz Inc., et al., No. 2:15-cv-03080-JAK-JEM, was filed against the Company and certain of its directors and officers in the United States District Court for the Central District of California. The complaint, which purports to be brought by a Company shareholder, relies largely on an anonymous internet analysis and is replete with unsupported, false and misleading allegations about the Company and the Cadiz Valley Water Conservation, Recovery & Storage Project (“Water Project,” “Project”) that are obvious from reviewing and comparing the allegations to information already within the public domain. Moreover, the true status of the Project has been previously set forth by the Company within its public disclosures and more recently on its website (LINK). The Company will exert all reasonable means to vigorously defend against this baseless action.
In the midst of the continuing and deepening record drought in California, the Company is continuing to progress the innovative Water Project towards final implementation. The Project is a public-private partnership with the Santa Margarita Water District that will provide a new supply of 2.5 million acre-feet of water to parched California over its 50 year term, mostly through conservation of water that presently evaporates, and will deliver this water without a single adverse environmental impact attributable to Project operations. The open, transparent regulatory review completed for the Project resulted in separate and independent approvals under the California Environmental Quality Act and the San Bernardino County Desert Groundwater Ordinance. Both of these approvals were upheld against 6 separate legal challenges in Orange County Superior Court in 2014. We are now working to process final certifications prior to construction, including terms related to how Project water will be transported into Southern California.
Once construction begins, the Water Project will generate nearly a billion dollars of economic stimulus for the Inland Empire, employ thousands of people and provide more than a billion dollars in water quality and water supply reliability benefits for portions of six Southern California counties, all without public subsidies of any kind. Meanwhile, the Arizona & California Railroad (ARZC) also stands to gain substantial economic benefits that will increase the versatility of its operations, economic profitability and safety through the improvements that will be installed concurrent with the construction of a 43-mile pipeline to connect the Project with the Colorado River Aqueduct. This 43-mile pipeline route was chosen in part because it will avoid any adverse impacts to the desert tortoise, a threatened species to which the Company has recently demonstrated its commitment to protect with our set aside of 7,400 acres of habitat as a mitigation land bank, the largest set aside of its kind in California history.