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26th letter or the request for a new certificate of insurance. Attorney Vitunac asked if Mr. Chancellor is saying that when he left the company, the company was derelict in meeting its responsibilities, and Mr. Chancellor stated he was not. Attorney Vitunac asked if someone was hired to replace Mr. Chancellor when he left and if he turned over his books and records, and he said no. He was retained on a retainer basis as needed for the utility operations, and he had no books and records of the company. They have their own books. Attorney Vitunac then asked what steps he did take to see the franchise was complied with after he left. Mr. Chancellor_ stated that he did discuss this with the staff in house, and Attorney Vitunac inquired about the particular staff. Attorney Sundstrom interjected that the question was whether there was insurance or not, and he did not want to get into other details. Mr. Chancellor confirmed that they do have the insurance; although, he does not have the certificate with him today. Attorney Vitunac then asked if Mr. Chancellor was in charge of creating a sinking fund as required by the franchise. Mr. Chancellor noted that the franchise contains language that appears to require a sinking fund. However, he did not believe in seven years they have been operating there has ever been an instance when the company has failed to perform as needed, to make repairs, do necessary maintenance, etc., and the utility company itself is supported financially by the parent company. Attorney Vitunac asked if they have a $30,000 sinking fund right now, and Mr. Chancellor stated no. Attorney Vitunac felt if they ever did have one, Mr. Chancellor would have known about it, and apparently he does not know about one. He asked if they ever got anything in writing exempting them from this requirement. UL 57 BOOK SSS