U.S. Bankruptcy Court for the Eastern District of Pennsylvania Imposes Sanctions on Chester Water Authority Attorneys

CHESTER, Pa. (Oct. 23, 2025) – The United States Bankruptcy Court for the Eastern District of Pennsylvania ordered the Chester Water Authority’s (CWA) attorneys to pay $135,575 in sanctions after finding that they “obstructed discovery in bad faith” by refusing to turn over records to the City of Chester in a timely manner as previously ordered by the Court.

The Receiver for the City of Chester sought these records as part of the bankruptcy process, and in February 2025, Judge Ashely Chan ordered CWA to produce them to the City.

CWA’s counsel, however, refused Judge Chan’s orders to release the documents, and on June 18, the City was forced to file a Motion to Enforce with the Bankruptcy Court to compel CWA to act. On the day of the hearing, CWA turned over nearly 12,000 documents sought by the City. In addition to the City having to incur legal fees, this delay caused the City to push back the response date for the water asset RFP process.

Judge Chan wrote in her Oct. 23, 2025 Order, “These circumstances support the Court’s inference that CWA’s conduct was intended to hinder and obstruct discovery in bad faith as part of its efforts to interfere with the RFP Process it has vehemently opposed since the Plan proposed it. The Court sincerely doubts that CWA would have ever made further production without the pressure applied by the Motion to Enforce, justifying the Court exercising its inherent power to sanction counsel for CWA in this matter.”

The amount of the sanctions represents the City’s legal expenses related to its efforts to obtain the records from CWA.

Chester Receiver Vijay Kapoor said: “We are grateful for Judge Chan’s ruling, which makes clear that CWA’s counsel improperly interfered with the City’s bankruptcy rights.”

The full Order is available to read here.

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