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Sale of D&L is a win-win situation, creditors’ lawyer says.
YOUNGSTOWN
A Denver company’s purchase of almost all of D&L Energy Inc. of Youngstown for $20.7 million is a winning situation for everyone affected by the local company’s bankruptcy, according to a lawyer for D&L’s unsecured creditors.
“Once all of the debtor’s assets are sold, and the bankruptcy process concludes, it is likely that all creditors will be paid in full,” said Sherri Lynn Dahl, a Cleveland lawyer for the committee of unsecured creditors.
The sale at auction to Resource Land Holdings LLC, which was the highest bidder, was approved Tuesday by Judge Kay Woods of U.S. Bankruptcy Court here.
“Selling the assets will likely allow the buyers to obtain the necessary permits to fully operate the company and maximize value to the community,” Dahl said. “The creditors will receive payment and may do business with the new company,” she added.
Some 190 claims totaling about $20 million have been filed by D&L’s creditors, Dahl said.
The auction had been sought by D&L to sell its remaining assets and liquidate.
D&L filed for Chapter 11 bankruptcy protection in April, citing high cleanup costs related to the dumping of oil-field waste from the company’s Salt Springs Road location into a Mahoning River tributary late last year and early this year. State regulators revoked D&L’s operating permits in February.
A federal indictment in February charged D&L’s owner, Ben Lupo; Hardrock Excavating LLC, which was also owned by Lupo; and Michael P. Guesman, 34, of Cortland, who was employed by Lupo, with violating the Clean Water Act through deliberate illegal discharges “on numerous occasions” between Nov. 1, 2012, and Jan. 31, 2013.
Guesman has pleaded guilty as charged, and the U.S. attorney has agreed to recommend leniency for him at his January sentencing in exchange for his acceptance of responsibility and “substantial assistance” to the prosecution.
In his written plea agreement, Guesman said he dumped the waste from storage tanks into a stormwater drain at Lupo’s direction on 24 nights beginning Dec. 12, 2012.
Lupo, 62, of Poland, and Hardrock have pleaded innocent.
The auction began with four bidders at an all-day session Nov. 13, with two bidders participating in a three-hour session Saturday, according to D&L’s request that the judge approve the sale.
The Denver company is acquiring “substantially all” of the assets of D&L, but it is not acquiring any of D&L’s liabilities, according to court documents.
Founded in 1986, D&L said at the time of its bankruptcy filing that it had 18 employees, 580 operating oil and gas wells in Northeast Ohio and northwest Pennsylvania and 21,000 acres under oil- and gas-drilling leases.
One well, which is owned by D&L and other investors, is excluded from the sale agreement, Dahl said.
Resource Land Holdings says on its website that it was founded 15 years ago to invest in American agricultural, timber and mining properties.
The company said it “invests in properties across a broad range of resource-rich asset classes” and focuses on “properties that are often ignored by the institutional investment community.”
Resource Land Holdings officials could not be reached to comment about their reasons for purchasing D&L.