Case No. RK272-04053

November 12, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Supplemental Order

Name of Applicant: George L. Gear

Date of Filing: December 2, 1996

Case Number: RK272-04053

This Decision and Order will consider an Application for Supplemental Refund filed by George L. Gear in the Subpart V crude oil refund proceeding being conducted by the Office of Hearings and Appeals (OHA). (1) The Application is based upon purchases of refined petroleum products made by Gear Drilling Co. (Gear).

In his request for a supplemental refund, Mr. Gear advised OHA that Gear was the subject of a Chapter 11 Bankruptcy proceeding during which its operating assets were sold to another entity. OHA subsequently learned from a member of Gear’s Creditors’ Committee that any after-acquired assets of Gear, including the subject refund, should be distributed to three entities: Midwest Energy Cementing, Inc. (Midwest), Adams & Sons Trucking, Inc. (Adams Trucking), and Bob’s Water Service. Mr. Don Adams of Adams Trucking furnished OHA with documentation which suggests that Gear transferred its right to the refund under consideration to the three entities named above through a series of complicated assignments. When OHA contacted Mr. Gear to discuss possible ambiguities in the assignment documents, Mr. Gear opined that the subject refund had been assigned to Midwest, Adams Trucking, and Bob’s Water Service. See Record of Telephone Conversation between George Gear, and Ann Augustyn, OHA Attorney (October 2, 1997).

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 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).

In this case, we have determined that Mr. Gear relinquished his right to receive the supplemental crude oil refund through a series of assignments. We will therefore deny the Application submitted by George L. Gear.

It Is Therefore Ordered That:

(1) The Application for Supplemental Refund filed by George L. Gear, Case No. RF272-04053, 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: November 12,1997

(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).