D&L Energy to sell assets
YOUNGSTOWN – Attorneys representing the Youngstown company linked to a January brine-dumping case are asking a federal bankruptcy court judge to schedule an auction next month to sell virtually all of the company’s remaining assets.
D&L Energy attorneys on Friday filed a motion in federal bankruptcy court outlining how the company has attempted to sell its assets to raise capital needed to pay cleanup costs and fees associated with the brine dumping. The attorneys have asked the judge to approve a Nov. 13 auction at the Cleveland law offices of Squires Sanders LLP.
Since filing April 16 for Chapter 11 federal bankruptcy protection, D&L Energy has retained the services of investment banking firm SS&G Parkland Consulting to market and sell all the company’s assets. In a court document filed Friday, the company’s attorneys said the company has approached 2,261 potential buyers, and last month ran repeated advertisements in various Dow Jones publications.
To date, the company has received signed documents expressing interest from 44 potential buyers.
The Salt Springs Road-based energy company filed for federal bankruptcy protection after being saddled with more than $1 million in cleanup costs and loss of business when the company’s owner was linked to a criminal and environmental case involving the illegal dumping of oilfield waste.
Owner Benedict Lupo, 62, of Poland, is facing a single count of violating the federal Clean Water Act after he is alleged to have ordered an employee of a sister company to dump the waste in a storm sewer. The brine eventually drained into a tributary of the Mahoning River, leading to environmental cleanup that lasted more than a month.
Though the employee, Michael Guesman, had worked for sister company, Hardrock Excavating, D&L Energy footed the bill for cleanup.
Court documents indicate the debtors have “incurred substantial liabilities with respect to clean up efforts which include, but are not necessarily limited to, clean up costs and penalties / fines imposed by both the state and federal governments and independent contractors. D&L’s general business reputation has suffered greatly from these incidents and has resulted in decreased business operations / revenues.”
The filings note that D&L officials have concluded the sale of their assets and business is necessary because they cannot operate without bankruptcy court protection. They believe sale of the assets will enable them to fully pay the unsecured creditors collectively owed more than $5 million.
Lupo remains the majority owner of the company although he has relinquished his role as CEO and director to his wife, Holly Serensky Lupo. He is awaiting trial on the criminal charge.
His employee, Guesman of Cortland, has pleaded guilty to the same charge and is awaiting sentencing. He has agreed to cooperate in the criminal prosecution of Lupo.