CONCORD, N.H. | The state Supreme Court yesterday upheld a lower court's ruling that former East Derry fire Chief John Nadeau must repay the outstanding portion of the $89,000 severance package he received in 2004.

The Supreme Court decision affirms Superior Court Judge Kenneth McHugh's November 2005 order, where he called Nadeau the likely "aggressor" in organizing the severance package "scheme" from the now-closed East Derry Fire Department.

Both courts found that Nadeau had secured a job to lead the Massachusetts Fire Fighting Academy before resigning from the East Derry department.

By requesting Nadeau's resignation, then-Chairman Allan Lundblad of the East Derry Fire Commission, triggered a severance package equal to about nine months' pay. Had he quit on his own, Nadeau would have received three weeks' pay, or less than $5,000. Lundblad previously repaid $12,000 of the package for his role in the matter, leaving about $77,000 outstanding.

"I think a terrible injustice is being righted," said David Milz, former chairman of the East Derry Fire Commission. "Now the (precinct) can finally put everything to rest."

The East Derry Fire Precinct closed after merging with the Derry Fire Department in 2005. The commission at the time voted to prepay legal fees to continue the case if Nadeau appealed to the Supreme Court. Any money turned over as a result of the suit would go to the Derry Fire Department's equipment fund.

Now that the case has been resolved, Milz said he plans to ask interim Derry Town Administrator John Moody to have the town attorney proceed with collecting the money from Nadeau. He also said he will ask that the attorney determine if criminal statutes were violated and contact the attorney general if criminal liability is found.

Former East Derry Fire Commissioner David McPherson said he was "thankful" that the court upheld the Superior Court decision because "Nadeau and Lundblad colluded" to take the precinct down and "Nadeau walked away with almost $90,000."

"Justice for the taxpayers of East Derry will hopefully be served when the Derry Town Council pursues Mr. Nadeau for the balance of this judgment," McPherson said.

Nadeau has 10 days to request a reconsideration of the court's opinion, but those are rarely granted, according to Dawnangela Minton, a lawyer for the East Derry Fire Precinct.

Neither Nadeau nor his attorney, Glenn Milner of Cook & Molan in Concord, returned calls seeking comment on the decision yesterday.

Nadeau argued in the appeal that McHugh's order to rescind the severance payment was outside the Superior Court's discretion because there was no misrepresentation or fraud leading up to the agreement. But the state Supreme Court disagreed.

"To the contrary, considerable evidence of fraud and misrepresentation was found by the trial court," Senior Associate Justice Linda Dalianis wrote in the decision.

Dalianis also cited comments Lundblad made to the attorney that prepared the separation agreement, including "the Chief and I are going to take it down" and that the resignation would be requested "under the guise" of a performance review at the Nov. 23, 2004, meeting.