Delaware company said to be interested in buying troubled Pasco biofuels firm

By Kristi Pihl, Tri-City HeraldMarch 9, 2014 

PASCO -- An energy company wants to buy Green Power, a troubled Pasco biofuels company, its acting CEO says.

Judith Calhoun said Green Power, which filed for bankruptcy protection last month, is being sold to Atlantis Renewable Energy Systems.

She said the firm is from Delaware and includes several U.S. and international investors. But she declined to name any of them.

A check of public records shows Calhoun filed just last week to incorporate a company by the same name -- Atlantis Renewable Energy Systems -- in Washington and listed herself as the sole owner.

Calhoun, who also is Green Power's vice president of finance, confirmed Friday that Atlantis is the company buying Green Power and that she's one of Atlantis' owners. She then declined to answer any more questions.

The Issaquah businesswoman previously told the Herald that she expects the sale will wrap up in two months and the new owners will take what's left of Green Power's assets from the Big Pasco Industrial Park.

Bankruptcy records show Green Power claims it has $10 million in assets, including a partially built plant in Pasco, while 14 creditors say the company owes them $30.5 million.

But Calhoun told port officials recently that Green Power will be paid $16 million to enter into a joint venture with Atlantis Tech & Energy Co. of Delaware.

Atlantis plans to build a plant in New York, moving the three-plus story biofuels plant, the mobile plant and other equipment from Pasco, she told the port.

However, a search of records in Delaware and New York state found no record of either company.

In a recent proposal to the port, Calhoun called Green Power's technology "revolutionary," but that "a series of missteps caused by the founder has placed the company and its finances in a precarious position."

Green Power founder Michael Spitzauer is in federal custody on charges of wire fraud, aggravated identity theft and money laundering.

Spitzauer claims he has the technology to build a plant that will convert municipal garbage into biodiesel. He came to Pasco after proposing a similar $82 million plant in Fife on Puyallup tribal land. That plant was never built.

And the Pasco plant has been stalled for more than six years.

Calhoun disputes that. She told the Herald that the Department of Ecology would be happy to issue a permit, but the company hasn't applied for one.

Greg Flibbert, an Ecology unit supervisor in the air quality program, told the Herald the plant has never been operational.

He said nothing has changed since 2009, when the state put a lock on the facility and ordered construction to halt.

At the time, the state said Green Power started construction without getting the proper air quality permit. Green Power officials tried to get a permit then, but failed to give enough information for state officials to evaluate potential air quality issues.

Since then, Green Power has brought in materials to shred and opened up the Pasco warehouses and unfinished plant for tours to prospective investors.

Now that the company's lease has expired, the port is working to evict it from two warehouses and property that it has rented since 2007.

And last week, a Franklin County judge allowed county officials to go into the warehouses and auction off some Green Power equipment and tools to pay unpaid personal property taxes.

Franklin County put a lien on the property but is waiting for a judge to dismiss the bankruptcy before finalizing the sale. Pacific Steel & Recycling of Kennewick bid $58,700 for equipment and steel.

Andrew Hicks, the county's deputy treasurer, said they are being cautious.

But the Chapter 11 bankruptcy to reorganize the company is being delayed because Calhoun failed to include about 15 sets of required documents that would have fully detailed the business and its operations.

A hearing is set for March 28 at the federal courthouse in Seattle for Green Power to explain why its request for bankruptcy protection should not be tossed out.

Port officials now believe it will be the end of March or April before the property is back in port possession.

In the mean time, the Securities Division of the state's Department of Financial Institutions has closed its investigation of Green Power.

Martin Cordell, the agency's financial legal examiner, said they couldn't identify any Washington investors so they forwarded the information they'd collected to the U.S. Department of Justice.

He said the state Securities Division refers only a small percentage of cases to justice officials because proving criminal intent to defraud an investor is difficult. Many more deals fail because the economics just aren't there, he said.

He added that the victims in criminal cases usually do not get their money back.

It's already spent on personal uses or to repay earlier investors. Those at the end are left holding the bag, he said.

Still, too often, people hand over their money without verifying what they have been told, Cordell said.

"We all want to believe a good story," he said.

Even with criminal charges filed against Spitzauer, potential investors have called the Herald wanting to know more about Green Power's technology that reportedly can turn municipal waste to biofuel.

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