Case No. RK272-03956
October 24, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Name of Applicant: Empire Manufacturing Company
Date of Filing: October 17, 1996
Case Number: RK272-03956
This Decision and Order will consider an Application for Supplemental Refund filed by Empire Candle on behalf of Empire Manufacturing Company (Empire Manufacturing II) in the Subpart V crude oil refund proceeding being conducted by the Office of Hearings and Appeals (OHA). (1) The Application is based on petroleum product purchases made by Empire Manufacturing Company (Empire Manufacturing I) during the period, August 19, 1973 through January 27, 1981.
Based on information obtained from Drummond Crews, President of Empire Manufacturing II, and Kent Mismer, 100% shareholder of Empire Manufacturing I, OHA learned of the following relevant changes in the corporate structure of Empire Manufacturing I. On February 27, 1997, Empire Manufacturing I sold virtually all its assets, accounts receivable, and trade name to Diamond Brands, Inc., 100 % owner of Empire Candle. Mr. Mismer retained 100% of Empire Manufacturing Is stock and, in mid-March 1997, he changed the name of Empire Manufacturing I to SMTM, Inc. According to Mick Buttress, Empire Manufacturing IIs Chief Financial Officer, the Asset Purchase Agreement between Diamond Brands, Inc. and Empire Manufacturing I did not address the conveyance of refunds, such as the one at issue here.
OHA has a statutory duty to identify and provide restitution to injured persons. 15 U.S.C. § 4502(b). The Office would be negligent in discharging that duty if it granted a refund to someone other than an identified injured person. Texaco/Huffy Gas, 22 DOE ¶ 85,220 at 88,586, n.4 (1992). Therefore, the refund procedures the Office has established provide that the right to receive a refund generally remains with the owner of a firm during the price control period. Nevertheless, 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 firms 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).
In this case, Diamond Brands, Inc. did not purchase any of Empire Manufacturing Is capital stock. Moreover, the Asset Purchase Agreement between Diamond Brands, Inc. and Empire Manufacturing I apparently did not transfer the right to the subject refund to Diamond Brands, Inc., or either of its subsidiaries, Empire Candle or Empire Manufacturing II. As such, Empire Manufacturing I did not relinquish its right to receive the supplemental crude oil refund based on its petroleum purchases during the price control period. We will therefore deny the Application submitted by Empire Manufacturing II.
It Is Therefore Ordered That:
(1) The Application for Supplemental Refund filed by Empire Manufacturing Company, Case No. RF272-03956, be and hereby is denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: October 24, 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).