Utility Line Security, a company that fixed thousands of Pittsburgh pipes before its controversies clogged courts and flushed an authority director, was liquidated in U.S. Bankruptcy Court Friday.

The firm had in late 2009 entered into a contract with the Pittsburgh Water and Sewer Authority to provide insurance to fix customers' broken mains in return for $5 a month from each ratepayer who did not opt out of the coverage.

It filed for bankruptcy, though, after Allegheny County Common Pleas Senior Judge R. Stanton Wettick Jr. found that the arrangement violated state law.

The plan Judge Judith K. Fitzgerald approved Friday includes a $350,000 payment by the authority into the estate of ULS, in return for a release from any claims by ULS regarding its cancellation of the contract.

ULS had threatened to seek $3 million in damages from the authority.

The authority's payment joins some $150,000 that ULS has in the bank, a payment of a total of $10,000 from its shareholders, and modest returns from the sale of its assets to create a pool from which to pay plumbers who are owed money for work done prior to the bankruptcy.

The plumbers' claims total around $700,000, and they will get around 70 percent of what they seek.

Several plumbers had filed liens against the owners of homes at which they'd done work at ULS's behest, but those will be voided as part of the settlement.

"While we aren't turning water and sewer lines into wine, we are completing a plan within one year" with significant payback to creditors, ULS' attorney, Kirk Burkley, said.

Judge Fitzgerald praised those involved. "All of the parties really did do the right thing," she said.

ULS will withdraw its request for a state Supreme Court review of Judge Wettick's decision. Continuing, but now without ULS, are several state court lawsuits maintaining that the arrangement with PWSA harmed ratepayers.

No one bid on a vacant lot in Garfield that ULS owned, and the firm has until Feb. 8 to sell it or give it away. Other assets -- including some furniture, sewer tools and two vehicles -- were bought for $2,500 by Utilishield, a firm that shares several owners with ULS.

ULS's troubles were twofold.

The opt-out billing arrangement with the authority rankled some ratepayers and, ultimately, was found to run afoul of state law. And its ownership overlapped with that of companies that included friends and former business partners of Michael Kenney, who was director of the authority. Mr. Kenney resigned in December 2010, at the end of a year in which he was dogged by questions about his ties to ULS.