Sec. 16-262l. Receivership of water companies for failure to provide adequate service. Personal liability of directors, officers and managers.
Sec. 16-262l. Receivership of water companies for failure to provide adequate
service. Personal liability of directors, officers and managers. (a) As used in this
section, "water company" includes every corporation, company, association, joint stock
association, partnership or person, or lessee thereof, except an association providing
water only to its members, owning, leasing, maintaining, operating, managing or controlling any pond, lake, reservoir, stream, well or distributing plant or system employed
for the purpose of supplying water to twenty-five or more consumers on a regular basis,
provided if any corporation, company, association, joint stock association, partnership
or person, or lessee thereof, owns or controls eighty per cent of the equity value of more
than one such water supply system, the number of consumers shall, for the purposes of
this definition, be the total number of consumers of all such systems so controlled by
that corporation, company, association, joint stock association, partnership or person,
or lessee thereof.
(b) If the Department of Public Utility Control determines, after notice and hearing,
that any water company is unable or unwilling to provide adequate service to its consumers, the department may petition the superior court for any judicial district wherein the
company conducts its business for an order attaching the assets of the company and
placing it under the sole control and responsibility of a receiver.
(c) Notwithstanding the provisions of subsection (b) of this section, the Department
of Public Utility Control, the Department of Public Health, the municipality served by
a water company or an organization representing twenty per cent of the consumers of
the company may, upon notice to the company, petition the Superior Court for an order
attaching the assets of the water company and placing it under the sole control and
responsibility of a receiver, if (1) the company has failed to supply water to consumers
for at least five days during the preceding three months, (2) the Department of Public
Health determines that the company has not met the standards adopted under section
25-32 for the quantity and quality of public drinking water or (3) the petitioner has
reasonable cause to believe the consumers of the company have not received and are
unlikely to receive adequate service due to gross mismanagement of the company. Upon
the filing of such a petition, the court shall order the company to show cause why such
an order of attachment and receivership should not issue ten days from the date of service
of the order to show cause upon the company at its last known address.
(d) Any receiver appointed by the court shall file a bond in accordance with section
52-506 unless the court finds it unnecessary. The receiver shall operate the company to
preserve its assets and to serve the best interests of its consumers. If the receiver determines that the water company's actions which caused it to be placed under the control
and responsibility of the receiver under subsection (b) or (c) of this section were due to
misappropriation or wrongful diversion of the assets or income of such company or to
other wilful misconduct by any director, officer or manager of the company, the receiver
shall file a petition, with the superior court that issued the order of attachment and
receivership, for an order that such director, officer or manager be ordered to pay compensatory damages to the company by reason of such misappropriation, diversion or
misconduct.
(e) The Department of Public Utility Control shall determine the value of the assets
of a water company at the time of appointment of a receiver and immediately prior to
return of the assets to the owner. The claim of the owner of the company shall be limited
to the value determined at the time of the appointment of the receiver. The assets shall
be returned to the owner after full restitution has been made to the receiver for the value
of any improvements to the system and after payment has been made for any appraisal
pursuant to this subsection.
(P.A. 81-358, S. 4; P.A. 82-472, S. 51, 183; P.A. 83-542; P.A. 84-330, S. 7; P.A. 93-381, S. 9, 39; P.A. 95-257, S. 12,
21, 58; 95-329, S. 8, 31.)
History: P.A. 82-472 made technical correction in Subsec. (a); P.A. 83-542 added Subsec. (c), allowing, in addition
to department, municipalities and organizations representing water company consumers to petition superior court for
receivership in certain situations and providing for expedited judicial proceedings in such situations and added provisions
in Subsec. (d) allowing receiver to petition superior court in certain situations for order that director, officer or manager
pay compensatory damages to company; P.A. 84-330 added Subsec. (e) re valuation of assets of water company; P.A. 93-381 replaced department of health services with department of public health and addiction services, effective July 1, 1993;
P.A. 95-257 replaced Commissioner and Department of Public Health and Addiction Services with Commissioner and
Department of Public Health, effective July 1, 1995; P.A. 95-329 added in Subsec. (c), Department of Public Health and
Addiction Services [sic] to the list of those who may petition Superior Court, and in Subsec. (c)(2) added "quantity" to
the reference to adopted standards, effective July 1, 1995.