N.Y. Public Service Law § 89-h: Transfer of franchises or stocks

§ 89-h. Transfer of franchises or stocks. 1. No water-works

corporation shall transfer or lease its franchise, works or system or

any part of such franchise, works or system to any other person or

corporation or contract for the operation of its works and system,

without the written consent of the commission.

2. The permission and approval of the commission to the assignment,

transfer or lease of a franchise under this section shall not be

construed to revive or validate any lapsed or invalid franchise or to

enlarge or add to the powers and privileges contained in the grant of

any franchise or to waive any forfeiture.

3. No water-works corporation shall directly or indirectly acquire the

stock or bonds of any other corporation incorporated for, or engaged in,

the same or a similar business, or proposing to operate or operating

under a franchise from the same or any other municipality, unless

authorized so to do by the commission.

4. Save where stock shall be transferred or held for the purpose of

collateral security only with the consent of the commission empowered by

this chapter to give such consent, no stock corporation of any

description, domestic or foreign, company, including, but not limited

to, a limited liability company, association, including a joint stock

association, partnership, including a limited liability partnership, or

person, other than a water-works corporation, shall purchase or acquire,

take or hold, more than ten per centum of the voting capital stock

issued by any water-works corporation organized or existing under or by

virtue of the laws of this state, except that a corporation now lawfully

holding a majority of the voting capital stock of any water-works

corporation may with the consent of the commission acquire and hold the

remainder of the voting capital stock of such water-works corporation or

any portion thereof. Provided, that with the consent of such commission

and upon and subject to such terms and conditions as such commission may

fix and impose, any such stock corporation, company, association,

partnership or person may acquire, take and hold more than ten per

centum of the voting capital stock of any water-works corporation,

organized or existing under or by virtue of the laws of this state.

5. No consent shall be given by the commission to the acquisition of

any stock in accordance with this section unless it shall have been

shown that such acquisition is in the public interest. Nothing contained

in this section shall be construed to prevent the holding of any stock

heretofore lawfully acquired, nor to prevent, upon the surrender or

exchange of such stock pursuant to a reorganization plan, the purchase,

acquisition, taking or holding of a proportionate amount of stock of any

new corporation organized to take over, at foreclosure or other sale,

the property of any corporation whose stock has been thus surrendered or

exchanged; but the proportion of the voting capital stock of the new

corporation held by a stock corporation, company, association,

partnership or person and acquired by it by any such surrender or

exchange of stock shall not without the consent of the commission exceed

the proportion of the voting capital stock held by it in the former

corporation.

6. Every contract, assignment, transfer or agreement for transfer of

any stock by or through any person or corporation to any corporation,

company, association, partnership or person, in violation of any

provision of this chapter shall be void and of no effect, and no such

transfer or assignment shall be made upon the books of any such

water-works corporation, or shall be recognized as effective for any

purpose.