Federal bankruptcy court will consider bids for Hoku Materials that were entered in a two-day online auction Oct. 23 and 24.
To maximize payments to unpaid creditors, the potential buyers were given a choice: buy the plant in its entirety, or bid on it by the piece. The latter could lead to the plant being dismantled.
More people bid on pieces than on the entire plant, says David Barkoff, director of sales for Heritage Global Partners, the company hired to conduct the auction.
The top bid for the entire plant was $3.7 million, Barkoff says. He says he cannot disclose who submitted that bid.
He said the 1,364 lots received more than 60,000 views online.
According to Barkoff, the final auction figures will be handed over to the trustee of Hoku’s bankruptcy proceedings, and that trustee will then make recommendations to the judge. A final disposition of the assets is expected to be revealed during a Nov. 12 hearing in Pocatello.
Hoku filed for bankruptcy under Chapter 7 of the federal bankruptcy code, which often leads to liquidation, with property sold and proceeds distributed to creditors. A decision was made last month by U.S. Bankruptcy Judge Jim Pappas to sell the plant at auction.
Knowing the auction would not likely fetch the funds needed to recoup creditors, one of the larger creditors, North Carolina-based Industrial Piping Inc., sent a letter to the U.S. trade representative seeking help.
The letter urged the federal agency to look into the millions of dollars owed by Hoku parent company Tianwei New Energy Holdings, a China-based company.
“Tianwei is operated by key Chinese government officials and had revenues of $44 billion in 2011,” Industrial Piping wrote. “Tianwei owns a majority stake in Hoku and is one of several large companies controlled by the government of China. As of today, Hoku/Tianwei owes at least $100 million to various U.S. companies for work and goods furnished in good faith without pay.”
Industrial Piping said Tianwei has at least $100 million approved and available in Chinese banks to be paid out for the Pocatello plant and said Industrial Piping is entitled to be paid for the services it provided.
Industrial Piping and 24 other creditors signed an open letter that ran as a full-page newspaper advertisement Oct. 23 in the Idaho Statesman and the Idaho State Journal.
The letter accused Hoku and Tianwei of “legal shenanigans” and urged them: “Just honor your commitments. Pay up!”
The Idaho Statesman contributed.