NEWARK In one of their first acts as a newly constituted board, the trustees of the Newark Watershed Conservation and Development Corp. voted on Monday to file for bankruptcy.
The move is part of the trustees ongoing effort to shut down the entity that once ran the citys water infrastructure and pursue litigation to recover assets allegedly stolen from the agency.
Newark Mayor Ras Baraka said during Mondays trustees meeting that city officials were excited about creating the opportunity for bankruptcy and moving forward to go after the folks whoabused the trust of Newark residents.
The trustees agreed to file the petition for bankruptcy in their first meeting since being reshaped as part of a legal settlement between the city and the provisional trustees, who were court-appointed last year to oversee the agencys shutdown.
Under the agreement, Baraka joined the board, along with East Ward councilman Augusto Amador and South Ward councilman John Sharpe James.
The Rev. Dr. M. William Howard, Jr. of Bethany Baptist Church in Newark also was appointed to fill the trustee seat previously held by Rutgers University professor and historian Clement A. Price, who died last month following a stroke.
Those four men have joined provisional trustees James A. Zazzali, a former Chief Justice of the New Jersey Supreme Court; Dorothea OC. Wefing, a former Appellate Division judge who was temporarily assigned to the state Supreme Court; and Edwin Stier, a former federal and state prosecutor.
The settlement also means the city will pay $225,000 for the costs associated with the dissolution of the corporation. The city also has agreed to pay $112,500 for any expert witness needed in connection with the anticipated litigation.
The agency has about $399,000 in cash on hand and nearly $2.2 million in liabilities, said Eric Kanefsky, the agencys attorney.
With the litigation, the trustees are looking to hold people accountable for allegedly stealing from the agency, but also to recover money to pay its obligations, including the underfunded pensions of former agency employees, according to Stier.
We intendto collect as much as we can from as many sources as we can find to put ourselves in a position where we can pay off our obligations and return the remaining assets to the city, Stier said.
In a statement today, State Sen. Ronald Rice (D-Essex) praised the trustees for filing for bankruptcy. Rice and State Sen. Sam Thompson (R-Middlesex) have called for the New Jersey Legislative Select Committee on Investigation to examine the corporation.
I want to commend the new board for filing bankruptcy charges and working to recoup taxpayer dollars to help those who were harmed during this fiasco, Rice said in the statement. At the end of the day, when funding is lost to this kind of conduct, it comes back on the taxpayers in various ways, including increased property taxes, lost services and layoffs.
The trustees legal efforts come less than a year after a scathing report was issued in February by the New Jersey Comptrollers Office, alleging rampant mismanagement, corruption and abusive spending practices at the watershed agency.