Case No. RK272-03583


May 5, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Supplemental Order

Name of Applicant: Jaunty Textile Division of Advanced Textile Composites, Inc.

Date of Filing: June 3, 1996

Case Number: RK272-03583

This Decision and Order will consider an Application for Supplemental Refund filed in the Subpart V crude oil refund proceeding by Jaunty Textile Division of Advanced Textile Composites, Inc. (ATC). (1) The Application is based upon purchases of refined petroleum products made by Jaunty Textile Corporation (Jaunty) from August 1973 to January 1981.

In the Application, ATC explains that it bought the assets of Jaunty on June 7, 1993. ATC believes this asset purchase entitles it to receive supplemental refund monies due to Jaunty: “Since the refund of $6,510.08 is considered an asset, Jaunty Textile A Division of Advanced Textile Composites Inc. is due this amount.” (2)

We have a statutory duty to identify and provide restitution to injured persons. 15 U.S.C. § 4502 (b). We would be negligent in discharging that duty if we granted a refund to someone other than an identified injured person. Texaco/Huffy Gas, 22 DOE ¶ 85,220 at 88,586 n. 4. A potential crude oil refund is not generally considered an asset that can be bought, sold or transferred, for the simple reason that the refund itself does not exist until the OHA issues a Decision and Order granting a particular refund claim. As such, the refund procedures we have established provide that the right to receive a refund generally remains with the owner of a firm during the price control period. However, we have determined that the right

to receive a refund can be transferred to a subsequent owner of the firm if: (i) the firm is a corporation, the entire capital stock of which was purchased by the subsequent owner; or (ii) the firm's assets were sold under an agreement that indicated, either explicitly or implicitly, that potential refunds were being transferred. Mrs. M.B. Troy, 23 DOE ¶ 85,049 (1993).

ATC has confirmed that it did not purchase the capital stock of Jaunty when it purchased the assets of the firm in 1993. The right to receive a refund is premised on the idea of providing restitution to persons that suffered injury due to alleged crude oil overcharges during the refund period. Accordingly, the right to claim status as an injured person, for purposes of the Subpart V crude oil refund proceeding, is something which can be transferred to a second party only when there is a sales agreement containing specific contractual language addressing the right to receive a crude oil refund. A thorough review of the asset purchase agreement submitted by ATC does not show that the right to receive future crude oil refund monies due to Jaunty was either explicitly or implicitly transferred pursuant to the sale agreement. We will therefore deny the Application for Supplemental Refund submitted by ATC.

It Is Therefore Ordered That:

(1) The Application for Supplemental Refund filed by Jaunty Textile Division of Advanced Textile Composites, Inc., Case No. RK272-03583, is hereby denied.

(2) This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: May 5, 1997

(1) For information pertaining to the Supplemental Distribution of Subpart V Crude Oil Refund Monies, see State of Montana, et al., 25 DOE ¶ 85,059 (1995).

(2) See Application for Supplemental Refund filed by ATC on June 3, 1996, Case No. RK272-03583, by Joseph Annacarto of ATC.