Written on: August 28, 2018 by ICM
A California energy company has agreed to buy the assets of defunct Worley & Obetz for $8.1 million, a U.S. Bankruptcy Court filing shows. But the agreement by Wiggins Gas Propane & Alternative Fuels is just the first step of an auction process that will give other suitors a chance to top the offer. If Wiggins succeeds in acquiring the assets, it will be poised to restart the company. The assets include real estate, customer lists, inventories of gasoline, propane and diesel fuel, and delivery vehicles.
A Wiggins spokesman could not be reached for comment on Monday. If Wiggins is not the successful bidder, the Beverly Hills-based company will get a break-up fee of $243,000, according to the 46-page filing.
Worley & Obetz’s troubles became public in May, when the firm said it would have to lay off 150 people because of financial troubles caused by fraud, which it blamed on former CEO Jeffrey B. Lyons. When a reorganization plan failed to win the support of its lenders, Worley & Obetz abruptly closed on June 4, laying off the remainder of its 250 employees. It filed for bankruptcy June 6.
Monday, Lyons and the company’s former controller, Karen L. Connelly, were charged with fraud by Northern Lancaster County Regional Police. When the auction is held, on a date to be determined, bidders will be able to make offers for all the assets, as Wiggins did, or make offers for some. Christine Shubert, the court-appointed trustee overseeing the bankruptcy, will have the discretion to sell all the assets in a single transaction, or sell them in groups. In case she chooses the latter strategy, Shubert has divided the assets into 18 groups (or “lots”). Excluded from the assets to be sold is Worley & Obetz’s Ranck Plumbing Heating AC. Ranck was sold in late June to new owners for $1.6 million and has resumed operations.
The agreement with Wiggins is bad news for Worley & Obetz creditors hoping to recoup some of what they’re owed.
It values the Worley & Obetz assets far below the $30.1 million figure calculated by the Manheim-based company itself for a July court filing. The Wiggins value also is a small fraction of what Worley & Obetz owes its creditors — $90.1 million, according to that same July filing. The biggest group of assets belonged to Worley & Obetz’s retail division, which sold and delivered heating oil to homes, and diesel, kerosene and gasoline to farms and businesses. It includes the Worley & Obetz headquarters at 85 White Oak Road in Manheim, inventories of fuel, tankwagon trucks and customer names, addresses and other information.
Other major “lots” include assets from the Worley & Obetz:
Some of the other lots are 15 pickup trucks, 12 “premium” passenger vehicles (such as a Range Rover and six Jeep Grand Cherokees) and 14 “economy” passenger vehicles (including seven Ford Escapes).
Shubert also has created separate lots for the five Amerigreen businesses (wholesale propane, renewables, petroleum, electricity and natural gas) and two parcels of real estate.
Source: Tim Keel, Lancaster Online