BRUNSWICK — The Maine attorney general will not take legal action against Thibeault Energy, the oil company that closed suddenly in January and filed for bankruptcy protection last week.
Assistant Attorney General Linda Conti said the company’s owners, Conrad and Vivian Thibeault, simply do not have enough money to repay the dozens of creditors and hundreds of former customers who filed complaints with the attorney general’s office.
“It would be fruitless to pursue a civil action because it would be uncollectable,” Conti said.
Thibeault’s former customers, many of whom had prepaid oil-delivery contracts worth hundreds or even thousands of dollars, are “far enough down on the (creditors) list where there won’t be anything left over for them,” she said.
Conti said Savings Bank of Maine will likely receive all of Thibeaults’ remaining assets, which were estimated between $100,001 and $500,000, according to the company’s filing in U.S. Bankruptcy Court in Portland. Their liabilities were estimated to be between $1 million and $10 million.
The fuel company’s court-appointed trustee, William Howison, said he had not yet received any more specific information about the company’s finances, and therefore could not discuss specifics.
The Thibeaults’ bankruptcy lawyer, Neil Shankman, was away on vacation and could not be reached for comment.
In addition to finances, age was also a factor in the attorney general’s decision not to take action against the oil company. Conrad Thibeault is in his 70s, and Conti said there is little chance of him being able to pay back what he owes. Social Security is now the Thibeaults’ only income, according to Conti, and the court cannot order it used to pay debts.
Because the Thibeaults filed under Chapter 7 of the bankruptcy code, the company will be dissolved and all its assets sold to pay debts. Had the Thibeaults’ filed for a Chapter 11 reorganization and continued to operate the company, Conti said the AG’s decision may have been different, because the oil company could have made enough money to repay some of its creditors.
But with the company closing, there is “no danger to the public that they’re going to do this again,” she said. “They’re done.”
Local legislators met with the attorney general’s staff last week to discuss the agency’s findings. Rep. Alex Cornell du Houx, D-Brunswick, said while he was disappointed that there would be no formal action, he believed the attorney general did not come to his conclusion lightly.
“It’s disappointing that the people who bought the pre-buy contracts are left in the dust, but after the bank had taken all the assets … sadly there was nothing left,” he said.
Individual customers can still file their own class-action lawsuit, Conti said. But she said the likelihood of receiving any money from the Thibeaults is slim to none.
“When you know there’s no money to recover,” she said, “why would you pay more money (in legal fees)?”
AUGUSTA — A bill that would increase protection for consumers with prepaid contracts for heating oil was put on the back burner Tuesday by lawmakers.
After a brief public hearing, the Legislature’s Labor, Commerce, Research and Economic Development Committee resolved to put off discussion of LD 1536 until next January. In the interim, the Department of Professional and Financial Regulation, the attorney general and other interested parties and legislators will meet to nail down specifics.
The bill, which was sponsored by Rep. Alex Cornell du Houx, D-Brunswick, would require oil dealers to file a quarterly report with the AG’s office, showing evidence that the dealer is in compliance with state laws that ensure oil consumer protection.
Cornell du Houx said the bill was a direct result of witnessing what happened to customers who had pre-paid contracts with Thibeault Energy of Brunswick.
“It’s extremely frustrating and we’re looking to see how we can prevent that in the future,” he said.
State law now requires oil companies to have an available reserve equal to 75 percent of the prepaid oil, purchase a bond for 50 percent of the prepayments, or obtain a letter of credit for the purchases.
Under LD 1536, if a company does not comply with the law, the attorney general could issue a civil violation with a fine equal to the amount of the contract plus an additional 5 percent. The attorney general would then disburse a portion of the fine to the consumers who lost money when the company did not deliver the prepaid oil or natural gas.
During the hearing, Anne Head, commissioner of the Department of Professional and Financial Regulation, said the bill left a lot of unanswered questions. She wanted to know what type of reporting currently takes place, how many oil dealers offer prepaid contracts, and how an outside observer would be able to tell if a company is not in compliance with the state law.
In response, Sen. Christopher Rector, R-Thomaston, successfully moved for the delay until next winter.
— Emily Guerin