F&S Oil to be auctioned

By Timothy Charles Holmseth | July 14, 2008
Web exclusive posted July 23, 2008 at 9:23 a.m. CST

The unexpected closure of F&S Oil Inc., a biodiesel production facility in Waterbury Conn., on March 7 has resulted in a chaotic situation.

A series of court motions were filed July 15 in Hartford Superior Court by Carlton Helming, a forensic accountant with Wallingford, Conn.-based Helming and Co. P.C., which was appointed receiver of the company in March.

A notice of sale for the facility is scheduled for August 12. Helming said because there has been tremendous interest in the plant, the auction date was moved from July 29 to August 12. "Prospective bidders are having experts flown in from all over the country," he said.

Helming said the value of the business could range between $4 million to $12 million. "It depends on feedstock-type and quality," he said. "Experts and estate documentation indicate virgin soy oil can be processed at 8 million gallons per year and yellow grease or tallow can be processed at 4 million gallons per year, with a better financial spread. The attraction of this plant is that it was designed to be flexible to handle a variety of feedstocks."

According to the auction notice Helming and Co. estimate that F&S Oil invested not less than $4 million in facility design, engineering, and construction, and the equipment purchases and leases located at the facility. Onsite storage includes 20,000 gallons for feedstock, 8,000 gallons for glycerin, 8,000 gallons for methanol, 3000 gallons for nitrogen and 100,000 gallons for B100 finished biodiesel. Bidders must pay a $2,500 non-refundable deposit to participate in the auction.

A report filed by Helming's firm with the court on July 8 indicates that the process has been cumbersome due to record-keeping issues by F&S Oil. "This has been a most challenging assignment due to the companies having been shut down and the receiver limited to access to many former employers and/or other sources of information. In addition, most financial records do not appear to have been adequately reconciled for the past two years (some as many as five)," it said.

Among the findings in Helming and Co.'s report:
  • F&S Oil's record-keeping practices did not follow proper procedure, consumer prepaid deposits were not properly secured, bonded, hedged or secured.

  • Financial books, records, accounting and reports of F&S Oil are complex, difficult to reconcile, in diffuse locations, voluminous and hardly transparent.

  • The business practices and administration of the affairs of F&S Oil are complex, seemingly arbitrary and informal.

  • There are multitudes of "financial transactions" in favor of insiders.

  • The company engaged in various non-transparent, non-ordinary course and substantial business transactions, asset dispositions and "investments.

Creditors are not allowed to initiate legal proceedings against F&S Oil until the court lifts the stay that's currently in place. As far as any wrong-doings or illegal activity on any one's part, Helming said, "[It] is too premature to be definitive. We are aware of those allegations and need time to investigate."
Array ( [REDIRECT_REDIRECT_HTTPS] => on [REDIRECT_REDIRECT_SSL_TLS_SNI] => biodieselmagazine.com [REDIRECT_REDIRECT_STATUS] => 200 [REDIRECT_HTTPS] => on [REDIRECT_SSL_TLS_SNI] => biodieselmagazine.com [REDIRECT_STATUS] => 200 [HTTPS] => on [SSL_TLS_SNI] => biodieselmagazine.com [HTTP_HOST] => biodieselmagazine.com [HTTP_CONNECTION] => Keep-Alive [HTTP_ACCEPT_ENCODING] => gzip, br [HTTP_X_FORWARDED_FOR] => [HTTP_CF_RAY] => 80c10375b9249c8a-IAD [HTTP_X_FORWARDED_PROTO] => https [HTTP_CF_VISITOR] => {"scheme":"https"} [HTTP_USER_AGENT] => CCBot/2.0 (https://commoncrawl.org/faq/) [HTTP_ACCEPT] => text/html,application/xhtml+xml,application/xml;q=0.9,*/*;q=0.8 [HTTP_ACCEPT_LANGUAGE] => en-US,en;q=0.5 [HTTP_CDN_LOOP] => cloudflare [HTTP_CF_CONNECTING_IP] => [HTTP_CF_IPCOUNTRY] => US [PATH] => /sbin:/usr/sbin:/bin:/usr/bin [SERVER_SIGNATURE] =>
Apache/2.2.15 (CentOS) Server at biodieselmagazine.com Port 443
[SERVER_SOFTWARE] => Apache/2.2.15 (CentOS) [SERVER_NAME] => biodieselmagazine.com [SERVER_ADDR] => [SERVER_PORT] => 443 [REMOTE_ADDR] => [DOCUMENT_ROOT] => /datadrive/websites/biodieselmagazine.com/ [SERVER_ADMIN] => root@localhost [SCRIPT_FILENAME] => /datadrive/websites/biodieselmagazine.com/app/webroot/index.php [REMOTE_PORT] => 62380 [REDIRECT_QUERY_STRING] => url=articles/2578/f&s-oil-to-be-auctioned [REDIRECT_URL] => /app/webroot/articles/2578/f&s-oil-to-be-auctioned [GATEWAY_INTERFACE] => CGI/1.1 [SERVER_PROTOCOL] => HTTP/1.1 [REQUEST_METHOD] => GET [QUERY_STRING] => url=articles/2578/f&s-oil-to-be-auctioned [REQUEST_URI] => /articles/2578/f&s-oil-to-be-auctioned [SCRIPT_NAME] => /app/webroot/index.php [PHP_SELF] => /app/webroot/index.php [REQUEST_TIME_FLOAT] => 1695621277.206 [REQUEST_TIME] => 1695621277 )