Green Power’s second Chapter 9 attempt falls flat

June 22--A troubled Pasco biofuel company's second attempt to seek bankruptcy protection has failed.

That means a group of Tri-City-area creditors can move forward on their efforts to foreclose on Green Power's unfinished plant in the Big Pasco Industrial Park.

U.S. Bankruptcy Court Judge Timothy Dore dismissed Green Power's latest bankruptcy case this week after the company failed to meet deadlines to provide certain information.

Green Power did not provide proof of insurance and additional financial information, according to court documents. The company also did not disclose the connections between the proposed buyer and Green Power or give any evidence to show the buyer's ability to close on the $12 million deal.

Judith Calhoun, Green Power's acting CEO, said in court documents that she filed the most recent bankruptcy case so could be sold.

Calhoun has been the acting CEO since Green Power founder 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.

Altogether, Green Power and Spitzauer owe about $36 million, including interest, to about 40 creditors, according to court documents.

While Calhoun found an attorney for the most recent bankruptcy case, Gail Brehm Geiger, an acting U.S. Trustee, expressed concern because the attorney had apparently received a $15,000 retainer for the prospective buyer.

That would give the attorney an interest in the estate that would make it impossible for him to properly represent it, according to court documents.

Calhoun previously told the Herald that the buyer was Atlantis Renewable Energy Systems, a company she recently incorporated, but she said in court documents the company is now being sold to a different buyer.

She blacked out the buyer's name from the documents she filed with the bankruptcy court, claiming she was doing so because of "inaccurate newspaper reporting."

However, Peter Gawain, whose signature is on the new purchase and sale agreement, also is a manager of a company that owned Atlantis Renewable Energy Systems, according to documents filed by Calhoun during her first attempt at getting bankruptcy protection and documents filed with the Arizona Corporation Commission.

Since the bankruptcy has been dismissed, two of Green Power's Tri-City creditors will get the chance to make their case to a Franklin County Superior Court judge on June 30. The foreclosure case was on hold because of the bankruptcy filing.

Those creditors, 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, have formed a company called Panda Holding to pursue what Green Power owes them.

Both have received court judgments for the debts owed by Green Power. Green Power owes American Electric more than $1 million for electric work on the unfinished Pasco plant. Osterloh says he's owed $4.4 million, including interest.

Calhoun identified about $14.8 million in debts but claims most of that is disputed. The company's list of creditors as reported by Calhoun includes three of the companies Spitzauer is accused of defrauding, as well as companies that have civil court judgments against Green Power.

The Port of Pasco also is in the process of evicting the company from its only physical location at the Big Pasco Industrial Park, where its unfinished 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.

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

-- Kristi Pihl: 509-582-1512; [email protected]

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