- The Washington Times - Tuesday, October 4, 2005

The D.C. Water and Sewer Authority and creditors of a health care company are disputing whether the utility properly filed claims to collect hundreds of thousands of dollars in unpaid water and sewerage bills incurred by two D.C. hospitals.

For months, creditors of the parent company of Hadley Memorial and Greater Southeast Community hospitals have sought to disallow WASA claims seeking nearly $500,000 in unpaid bills.

The parent company, Arizona-based Doctors Community Healthcare Corp., emerged from bankruptcy last year. As part of the reorganization plan, a liquidating trust was formed to represent unsecured creditors in the case.

The trust has disputed WASA’s claims.

The trust has argued, among other things, that the utility issued certificates of delinquency on the unpaid accounts before sending the bills to the hospitals, an action the trust said violated D.C. law.

In addition, the trust stated in its filings last week that it uncovered documents at the D.C. office of the recorder of deeds that show that WASA had forgiven most of the debt for which it is now seeking payment.

Sam J. Alberts, a trustee for the liquidating trust, declined to comment on the dispute, citing ongoing litigation.

WASA officials said yesterday that they are confident they would collect the unpaid bills, which date to 2001. Officials said they expect to receive a written order from U.S. Bankruptcy Court Judge S. Martin Teel Jr. upholding WASA’s liens as secured claims.

“We have and we will continue to aggressively go after these large balances that are owed,” said WASA spokeswoman Michele Quander-Collins. “Those costs drive up the costs to other rate payers.”

The trust also has filed documents asking Judge Teel to impose sanctions against WASA, citing lien releases it said WASA filed in 2002.

According to the trust, the releases invalidate three of WASA’s four claims in the bankruptcy case, or $459,455 of more than $493,000 claimed.

“Submission of a false claim may subject a person to sanctions,” according to documents filed by the trust.

The trust is seeking sanctions that include attorneys fees and disallowance of all claims in the case, court documents show.

Miss Quander-Collins said yesterday that WASA is aware of the trust’s request for sanctions and that it plans to file a response in U.S. Bankruptcy Court.

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