YOUNGSTOWN, Ohio – A Mahoning County Common Pleas Court has appointed a receiver to manage the affairs of SOBE Thermal Energy LLC to maintain utility services to downtown customers.
Judge Anthony Donofrio on Friday issued an order approving the Public Utilities Commission of Ohio’s motion for the court to assign a receiver to preserve the assets of the troubled district heating and cooling company.
The court appointed Reg Martin – who served as receiver to manage the assets of the system under its previous owner, Youngstown Thermal – as receiver again.
Martin is authorized to enter, take possession of, manage, operate, protect and assume complete and exclusive control over all of the assets of SOBE, including all real property, inventory, equipment, accounts, revenues, general intangibles, investment property, documents and bank accounts, according to court papers.
The receiver is also authorized to borrow funds that are reasonably necessary “to preserve and protect the assets and to undertake and complete its duties.”
The PUCO’s Board of Commissioners on Sept. 18 approved a measure ordering the Ohio attorney general to appoint a receiver for SOBE, citing the danger of insolvency and its inability to serve 27 buildings and 90 residential units downtown with heating and chilled water services.
The company assumed the assets of Youngstown Thermal in 2019 from receivership and planned to use recycled tire chips to produce synthetic gas as a source to fuel its steam heating operation on North Avenue.
In the meantime, SOBE, based in Dublin, Ohio, agreed in 2019 to lease a mobile steam unit from Wabash Power Equipment Co. so it could serve customers while the plant converted its systems to synthetic gas. However, SOBE failed to make rental payments under the lease agreement, court documents say.
An Illinois federal court in January awarded Chicago area-based Wabash a default judgment totaling $383,214 against SOBE for breach of contract. Wabash then filed a motion in Mahoning County in May requesting that the court issue an order allowing repossession of the equipment. According to court papers, Mahoning Common Pleas Judge Anthony Donofrio issued a default judgment in favor of Wabash on Aug. 21, allowing it to take immediate possession of the mobile unit.
The city earlier this week announced it had reached an agreement with Wabash that postpones repossession of the mobile unit until Sept. 30. This allowed SOBE to temporarily continue providing heating and cooling services to downtown customers. The city had also agreed to pay Wabash $20,000 to continue service, court papers say.