CHESTER – The lawyer for the Chester Water Authority has likened the town receiver’s filing for bankruptcy on behalf of the city of Chester to the “logic of bank robbers”.
“They’re holding pensioners hostage and they’re using bank robber logic,” Chester Water Authority lawyer Francis Catania said of receiver Michael T. Doweary, adding that logic is “I need money. You have money. I’ll take your money.
The attorney reiterated his claim that the receiver wants to privatize the CWA.
“He’s going to ask the court to take over the Chester Water Authority,” Catania said, adding that the burden of paying for Chester’s financial troubles would then shift from government to citizens and taxpayers.
On Thursday, Doweary filed for Chapter 9 bankruptcy in U.S. Bankruptcy Court for the Eastern District of Pennsylvania for the City of Chester so it can resolve its financial debts and disputes, including a projected $46.5 million deficit next year.
The Receiver’s Office released a statement regarding Catania’s claims.
“Our response is that the receiver’s position that monetization must take place – but he is open to it remaining in the hands of the public – remains the same,” said Vijay Kapoor, Doweary’s chief of staff. “We look forward to continued discussions with all groups, including the CWA, to achieve the goal of sorting out Chester’s finances.”
Catania made further comments on the receivership’s bankruptcy.
“The state has a $5 billion surplus,” he said. “Why don’t they help the city of Chester?”
Catania said the state helped Philadelphia in 1992 when then-Mayor Ed Rendell approached them, as that city was in a similar financial situation. He said the state agreed and that led to the formation of the Pennsylvania Intergovernmental Cooperation Authority, which still exists to oversee Philadelphia’s financial operations.
“Nobody in Harrisburg does that for Chester,” Catania said.
Earlier, the Receiver’s Office said that while a large one-time cash injection could initially help the City of Chester, for it to be financially viable, other steps need to be taken.
Catania questioned the amount of $1 million listed for Kevin Greenberg of Greenberg Traurig in the list of creditors in the bankruptcy filing. The amount is labeled as “Contingent, Unliquidated and Disputed” and relates to professional services.
Catania said Greenberg was hired at the suggestion of the state Department of Community and Economic Development in 2018 at a time when the Chester Water Authority was negotiating with Chester and ultimately resulted in a $60 million offer that didn’t came to nothing.
“It looks to me like the state gave a bounty to the Chester Water Authority,” Catania said, asking what Greenberg’s payment quota is. “If that’s true, we’re like John Wick in the ‘John Wick’ movies.”
He said the CWA required Doweary to publicly reveal documentation supporting this entry.
There is a public presentation that will be unveiled Tuesday at 1 p.m. on the receiver’s Facebook page.
Delaware County is also listed as owing the city $7.5 million for a 2009 lease.
Catania also questioned the protection of the city in light of the $400,000 sent to scammer in ‘phishing’ incident in June.
“Why didn’t the city have insurance coverage for a cybercrime?” he asked, saying the catcher was scapegoating the city. “He failed in that responsibility… Let’s see a copy of the internal controls the receiver recommended to prevent that.”
He also asked what impact filing for bankruptcy would have on the receiver’s lawsuit against the Delaware County Regional Water Control Authority.
In September 2019, DELCORA entered into a $276.5 million asset purchase agreement with Aqua Pennsylvania Wastewater Inc. When Chester sold its assets to DELCORA in 1973, it included a provision that upon dissolution of authority, the assets would be returned to the town or city. would receive compensation for them.
In court documents in the August filing, representatives for Aqua and DELCORA testified before the Pennsylvania Public Utility Commission that Chester’s assets ranged from $43 million to $84 million.
Catania asked if the receiver plans to pursue the DELCORA litigation in light of the bankruptcy.