Item 5. Other Events.
The following press release was issued today, Friday,
November 8, 1996:
CONSUMERS WATER COMPANY INCREASES
RESERVES FOR UNRECOVERED ENVIRONMENTAL
CLEAN-UP COSTS
Portland, Maine
November 8, 1996
Peter L. Haynes, President of Consumers Water Company, announced
that Consumers Ohio Water Company (COWC) today received an adverse
judgment entered on Monday, November 4, 1996 by the Lake County, Ohio, Court
of Common Pleas in its lawsuit to recover the costs incurred for the cleanup
of a 1993 mercury spill. As a result, COWC has increased the reserve
previously taken to cover the cleanup costs by $560,000, which is $370,000
or $0.04 per share after-tax.
Mr. Haynes stated that a contractor released a small amount of
mercury while removing instrumentation from one of COWC's water treatment
plants during reconstruction. The Company has previously disclosed that the
total cost of the remediation was approximately $900,000 and continues to
believe that it is not responsible for the spill. COWC attempted to resolve
the issue through negotiations with the contractor and its insurance carrier.
The negotiations were unsuccessful, and the parties pursued the matter
through the legal system. In granting its motion for a directed verdict,
and without the jury to which the case was presented being allowed to
deliberate, the judge found the contractor not to be liable for any of
the cleanup costs. The Company is currently deciding whether to appeal
the decision. However, until the appeal, if any, can be heard, the remaining
cost of the clean-up, together with legal costs incurred to date, will be
added to the reserve and will be shown as a charge against 1996 fourth
quarter earnings.
Consumers Water Company is an investor owned water resource
management company whose principal business is the ownership and management
of water utilities. Consumers provides water and wastewater services to
over 220,000 customers in six states, as well as professional and
engineering services to utilities through its subsidiary Consumers
Applied Technologies.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorzied.
CONSUMERS WATER COMPANY
(Registrant)
11/8/96 /s/ Peter L. Haynes
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Date Peter L. Haynes
Chief Executive Officer
11/8/96 /s/ John F. Isacke
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Date John F. Isacke
Chief Financial Officer
