Bankruptcy Filing Won’t Stop Owner From Operating Waste Treatment Plant In Pittsfield | New
PITTSFIELD – The owner of the aging Pittsfield waste-to-energy plant on Hubbard Avenue recently filed for bankruptcy, but Community Eco Power still plans to operate the facility for the foreseeable future.
Mayor Linda Tyer and a lawyer who represents Community Eco Power in its Chapter 11 bankruptcy protection case said the company plans to continue operating the 40-year-old facility during ongoing legal proceedings and in the -of the.
“That’s absolutely the plan,” said attorney Sam Anderson of the Portland, Maine, law firm Bernstein Shur, which represents Community Eco Power. The company filed for Chapter 11 on June 25 in Massachusetts bankruptcy court.
“What they told us is that this is a restructuring of their debt,” Tyer said.
In addition to keeping the plant open, Community Eco Power also plans to keep the workforce at its current level, Tyer said. As of June 18, the Pittsfield plant had 21 employees. Six of them are employees, while the other 15 receive hourly compensation, according to the bankruptcy filing.
North Carolina-based Community Eco Power bought the waste-to-energy plants from Covanta Energy Corp. in Pittsfield and Agawam in 2019. The company filed for Chapter 11 because the deferred maintenance at the Pittsfield facility was “kind of I expected,” Anderson said. “Because of that, they had to take out loans. “
According to the filing, Community Eco Power diligently explored a “range of options” to resolve its cash flow issues to meet its “debt and operational obligations” before deciding to seek Chapter 11.
Companies that apply for Chapter 11 usually do so to stay in business. These cases are often referred to as “reorganization” bankruptcies because the debtor typically files a reorganization plan so that they can continue to operate and pay their creditors over time.
Community Eco Power filed for Chapter 11 as the city negotiated its current waste disposal contract with the company. Negotiations had no impact on Community Eco Power’s decision to file for bankruptcy, and they are continuing, Tyer said.
The town of Pittsfield is listed as one of the company’s 30 largest unsecured creditors on the record. The city owes $ 76,158 in water and sewer costs. Tyer said she believed money owed to the city would be factored into restructuring plans.
“I’m sure this is part of the debt restructuring,” Tyer said.
In its file, Community Eco Power lists up to 200 creditors and up to $ 50,000 in assets. The company also owes Cintas Corp. of Lee $ 25,492 in “commercial debt” and to Berkshire Bank $ 1.34 million via a Paycheck Protection Program loan she received from the bank during the second cycle of the program and which has been guaranteed by the US Small Business Administration.
The payment of this debt is the subject of a request for remission which had not been resolved when Community Eco Power filed for bankruptcy.
In the summer of 2016, Covanta announced that it planned to shut down the Pittsfield plant by March 2017, as the size of the facility and high operating costs made it difficult to operate profitably. But, the city and Covanta subsequently reached an agreement to keep the plant open for another four years. The city has agreed to allocate $ 562,000 in money from the Pittsfield Economic Development Authority to bring the facility up to state and environmental standards so it can remain profitable.
The Pittsfield waste-to-energy facility was built by Vicon Corp. in 1981. It was sold to Energy Answers in 1994, and then became the property of Covanta in 2007, when this company purchased Energy Answers.
According to Eagle’s records, the Pittsfield waste-to-energy facility is one of the oldest such plants in the country.