Chester retirees sue receiver over Chester Water Authority sale process

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The Official Committee of Retired Employees filed a legal complaint Wednesday against the city of Chester’s outgoing receiver and his successor, seeking changes to the sale process of the bankrupt city’s largest asset.

Chester’s state-appointed receiver, Michael Doweary, and his chief of staff, Vijay Kepoor, want to monetize the Chester Water Authority, or CWA, with a caveat: that it remains publicly owned.

Retired city firefighters, police officers and office workers have long argued the city would receive far more money if they sold CWA to the private sector.

As the city’s largest creditor group, the retiree committee is asking U.S. Bankruptcy Judge Ashley Chan to compel the receiver to change course and fulfill his “fiduciary duty” to maximize profits.

“By preventing private-sector entities from making stand-alone bids for the Water Assets and inviting the loss of potentially hundreds of millions of dollars in sale proceeds, the Receiver is failing to pursue a value-maximizing transaction that would immensely benefit the City and the Retirees and is thus breaching this fundamental duty,” the complaint read.

According to the receiver’s office, monetizing CWA, the Stormwater Authority for the City of Chester and the city’s interest in the Delaware County Regional Water Quality Control Authority is the only path out of bankruptcy.

“While still reviewing what was filed, the Receiver’s position remains that the water assets should continue to be publicly owned,” the office said in a statement.

CWA is one of the Delaware Valley’s largest public water systems, serving more than 200,000 people across 37 municipalities across Chester and Delaware counties. Aqua Pennsylvania previously made a $410 million offer to acquire the entity.

Opponents of water utility privatization argue the massive, short-term prices are only made possible through skyrocketing bills — meaning customers cover the costs. Philadelphia’s collar counties have been a hotspot for water privatization in Pennsylvania. To keep water bills low, state officials have since acted to add further regulations and transparency to the sale process.

In August 2024, the receiver moved forward with plans to monetize CWA, drawing the ire of water officials. CWA, which has long asserted its independence from the city that created it in 1939, is staunchly opposed to any form of operational changes. There is an ongoing case before the Pennsylvania Supreme Court to determine who will decide its future.

CWA Solicitor Francis Catania said the authority is unable to comment at this time.

The complaint states that there is “no dispute” between the receiver and the retiree committee over the question in the state Supreme Court case. The committee said that the city “has the statutory right to repossess and monetize for its own benefit and the benefit of its creditors.” Their disagreement is regarding the bidding process for the water authority’s assets and the value of achieving “maximum fair market value.”

“If a sale does not represent maximum fair market value due to policy concerns of the Commonwealth or other regional interests, the loss must be offset by other assets of the Commonwealth—otherwise, retirees and the City unfairly bear the cost of that policy,” committee co-chairs Alan Davis and Chuck Bolgunas said in a joint statement.

The bid deadline is Sept. 2.