An attorney for the Lawrence-based utility, George Hopper, said the action was taken to protect the utility's investment in the system and combat soaring legal bills stemming from its ongoing skirmish with Mayor Deborah Cantwell.
Bankruptcy will ensure continued operation of the utilities while the disagreement is settled, Hopper said. Taking the matter to bankruptcy court also automatically halts Cantwell's efforts to put another operator in charge while a lawsuit the city filed against the utility plays out.
"It's madness. It's just a waste of money," Hopper said. "The utility is spending money, the city is spending money, and the dispute is not getting resolved."
Cantwell sued Lawrence Utilities in 2004 after Cantwell, a Democrat, wrested the office from long-time Republican mayor Tom Schneider. Schneider signed the contract with the company a year earlier without taking bids.
A trial court ruled the contract was void. That decision has been appealed to the Indiana Court of Appeals.
Cantwell said the filing was unexpected: "I look at it as another delay tactic."
She anticipates issuing a broader statement later today.
Lawrence Utilities has spent $14.7 million of a promised $15 million on infrastructure improvements, Hopper said. The utility is in danger of losing that investment if Cantwell's suit succeeds, he said.