Troubled Pasco biofuels company files for bankruptcy again

Kristi Pihl, Tri-City HeraldMay 23, 2014 

Green Power Sun

March 10, 2014 - The Port of Pasco is evicting Green Power, a tenant since 2007, from this warehouse in the Big Pasco Industrial Park. The company's CEO is facing federal criminal fraud charges and the company has filed for bankruptcy with an estimated $30.5 million in debts.

PAUL T. ERICKSON — Tri-City Herald Buy Photo

A troubled Pasco biofuels company has filed for bankruptcy again -- this time halting efforts by creditors to foreclose on Green Power's unfinished plant.

Two of Green Power's Tri-City creditors recently asked a Franklin Superior Court judge to allow them to auction off Green Power's belongings based on liens they've filed.

But a recent foreclosure hearing was canceled after Green Power's acting CEO filed for bankruptcy protection.

Judith Calhoun wrote that the company's bankruptcy plan would include enough money to repay Panda Holding LLC.

Panda Holding was formed by Jose Gonzalez, owner of American Electric of Richland, and James Osterloh of West Richland, who was Green Power's former chief engineer and owner of Concrete Structures.

Both have received court judgments for the debts owed by Green Power.

Panda Holding's attorney David Gardner said in court documents that he expected the judge would approve the foreclosure request.

"The only purpose for the (bankruptcy) filing was to 'unreasonably deter and harass' Panda, on the eve of its foreclosure hearing," Gardner wrote in court documents.

Green Power owes American Electric more than $1 million for electric work on the unfinished Pasco plant. Osterloh is owed $4.4 million, including interest.

Gardner has asked the bankruptcy judge to dismiss the case. A hearing is scheduled Friday. Calhoun failed to pay the $103 bankruptcy filing fee and reportedly did not provide the required information.

Green Power's unfinished Pasco plant has been stalled for more than six years after the state Department of Ecology shut down construction because the company lacked the necessary air quality permits.

Its founder and CEO, Michael Spitzauer, was federally indicted in connection with wire and bank fraud, aggravated identity theft, money laundering and lying on a federal tax return. He has been jailed since December.

In all, 12 creditors have liens against Green Power's property that amount to more than $6.1 million including interest, according to court documents.

Franklin County already has foreclosed on $58,700 of unpaid personal property taxes. The sale of some of the company's equipment and tools was completed in April after Green Power's first attempt to seek bankruptcy protect was thrown out.

Together, Green Power and Spitzauer owe about $36 million including interest to about 40 creditors.

However, most creditors do not have liens securing their debt and giving them a right to sell any of Green Power's property.

Gardner argues that Panda Holding, as the largest secured creditor, should be paid back first before other secured creditors. And American Electric's lien is the first in line on Green Power's personal property, and together, the two liens represent a majority of the secured debt against the entire plant, according to court documents.

In the meantime, the Port of Pasco is waiting to finish evicting Green Power. The port has control of the property, but the warehouse space can't be leased out to new tenants until Green Power's belongings are removed.

Port Executive Director Randy Hayden said if Panda Holding forecloses, that will wrap up the disposal of Green Power's personal property.

But if the creditors do not succeed or there are more delays, the port may need to look at other options so the warehouse can be leased.

-- To submit business news, go to bit.ly/bizformtch.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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