The Fayette County Commission-negotiated sale of four public service district to West Virginia American Water Company has been placed on hold as a circuit judge considers allegations that it does not specifically account for debt.
West Virginia-based engineering firm E.L. Robinson filed a suit this month alleging that the $13 million West Virginia American Water would pay the Fayette County Commission for the districts does not specifically make provision for the debt E.L. Robinson is owed by Kanawha Falls Public Service District. Robinson says once the sale is complete, Kanawha Falls will have no remaining assets from which the firm can collect its debt.
Robinson charged Kanawha Falls roughly $1.6 million for its services dating back to 2018. The public service district still owes more than $850,000.
Late last week, on Friday, July 17, Fayette County Circuit Court Judge Tom Fast ordered that upon E.L. Robinson Engineering Company posting a $100,000 bond with the Fayette County Circuit Court, a temporary restraining order shall be issued preventing Kanawha Falls PSD from selling, voting to sell, or taking any further action in the dissolution of the district.
The bond was entered July 20.
The order concludes that the plaintiff, E.L. Robinson, will suffer “immediate and irreparable harm if Kanawha Falls is permitted to proceed with the proposed sale of its assets to West Virginia American Water Company without provision for payment of the plaintiff’s claims, as the proposed asset purchase agreement expressly disclaims any assumption of Kanawha Falls’ debts and liabilities by the purchaser.”
The court also concluded that the plaintiff has no adequate remedy at law, finding that a judgment for monetary damages against Kanawha Falls will be “worthless” if Kanawha Falls no longer exists and has no assets.
Judge Fast added that the Fayette County Commission is “unlikely to provide a remedy because the commission is receiving $13 million in sale proceeds as consideration for assets it does not own; the assets belong to Kanawha Falls, a separate public corporation.”
The court also cited a likelihood of success on the merits of the engineering firm’s breach of contract claim.
The public interest also played a role in the court’s decision, with the court agreeing with the engineering firm’s claim that if a PSD obtains professional engineering services, then disposes of its assets to avoid paying for those services, qualified engineering firms will be unwilling to serve public service districts, harming the public interest.
The order states that fundamental fairness requires that the plaintiff be compensated for services that increased the value of the assets now being transferred.
The court order prevents the West Virginia Public Service Commission from approving the asset purchase agreement and/or the amended and restated asset purchase agreement until after the court has ruled on the plaintiff’s motion for preliminary injunction.
As soon as the Fayette County Commission approved and filed the asset purchase agreement in November 2025, questions of debt as well as the county’s authority to sell assets that it did not own arose immediately. Former Kanawha Falls Chairman Jonathan Grose claimed at the time that the asset purchase agreement would not cover all the PSD’s debt, and that the shortfall was in the millions.
The West Virginia Department of Environmental Protection and the West Virginia Water Development Agency also quickly filed an intervention in the sale, claiming grants that had been administered to the district were not accounted for in the agreement and that this could threaten the agencies’ abilities to fund public water and sewer infrastructure projects in the future.
When these claims of unaccounted-for debt were raised with the Fayette County Commission in November, Commission President John Brenemen said, “The debt will be covered in the purchase price due to depreciation of various assets from the grants that were given.”
After last week’s court ruling, WOAY reached out to the Fayette County Commission asking if they felt the deal needed to be renegotiated in regard to private and public debt and has yet to receive a response.
You can read the full order here:
