Magistrate OKs $250K Sale of Youngstown Thermal
YOUNGSTOWN, Ohio – A proposed sale of Youngstown Thermal Cooling LLC’s assets now awaits approval by the Public Utilities Commission of Ohio.
In a decision filed Aug. 6, Timothy G. Welsh, magistrate to Mahoning County Common Pleas Judge R. Scott Krichbaum, approved the motion by Reg Martin, receiver for Youngstown Thermal, authorizing the sale of the company’s assets for $250,000 to a company in Dublin, Ohio.
Martin filed the motion to authorize the sale in May.
Youngstown Thermal supplies steam heat to more than 35 customers in downtown Youngstown. The company began to experience financial troubles in 2017 after its largest customer, Youngstown State University, opted to build its own boiler units and left the system. The company was forced into receivership when it was unable to pay its bills.
According to the motion approved by Welsh, SOBE Thermal Energy Systems LLC, or an entity or entities to be formed, would purchase Youngstown Thermal’s real estate, “including all buildings and improvements thereof,” business and assets. Based on the “arguments and evidence” presented and a review of the record, Welsh found that Martin and SOBE entered into a “binding contract” and there were “valid grounds for the purchase contract to be approved.”
The $250,000 sale price “is believed to be the highest and best price to be had in the foreseeable future,” the receiver argued in its May 3 filing. In addition to the discussions with SOBE, Martin pursued alternatives that included the city of Youngstown acquiring the plant, but Mayor Jamael Tito Brown and other city officials opposed that option.
With the motion approved, the parties will next need to file an application with PUCO to transfer the assets, affirmed Matt Schilling, director of the agency’s office of public affairs.
“SOBE would need to be certified by the PUCO as a regulated utility, and would need to file its official rates, terms and conditions of service (called tariffs) with the PUCO for approval,” he continued. He did not know when that filing would take place.
No objections or memoranda opposed to the receiver’s motion were filed.
Proceeds from the sale will be distributed at closing as follows:
- To pay outstanding real estate taxes pro-rated through the date of the closing or as otherwise provided in the purchase contract.
- To pay fees and other closing costs attributable to the receiver.
- To pay all receivership administrative expenses, including the receiver’s fees and costs and counsel for receivers’ fees and costs, subject t the court authorizing payment of the fees and expenses of the receiver and receiver’s counsel.
Remaining sale proceeds will be held by the receiver subject to further order of the court.
Also on Aug. 6, Welsh approved the receiver’s third interim application for fees and expenses, for $35,063.75. That application was made in a separate motion.
Martin and representatives of SOBE did not respond to requests for comment Tuesday.
Copyright 2020 The Business Journal, Youngstown, Ohio.