Rhoads Energy to buy four Worley divisions

Rhoads Energy Corp. is planning to buy four divisions of bankrupt energy company Worley & Obetz Inc., with a Massachusetts company snagging most of the rest, court records show.

Under the deal, which was approved Tuesday in U.S. Bankruptcy Court, Rhoads is in line to take over the following Worley & Obetz divisions:

  • A propane business, serving residential, farm and small-business customers
  • An HVAC installation and maintenance business, serving residential and small commercial customers
  • Worley’s Amerigreen residential and commercial natural-gas business
  • Worley’s Amerigreen wholesale propane business

Rhoads Energy will operate the services from its Lancaster headquarters.

“We’re excited about it,” said Michael DeBerdine, CEO of Rhoads. But, he added: “You don’t go do something like this without a plan. We’ve been working on our plan for the last couple of months in anticipation of acquiring the propane assets in particular.”

That plan calls for Rhoads Energy to honor the remaining terms of Worley & Obetz’s HVAC and propane service contracts for all customers who choose to renew their plans with Rhoads Energy. Rhoads Energy has established an online process for former Worley & Obetz customers to confirm their account transfer.

Rhoads may also purchase Worley’s home heating and oil division, DeBerdine said.

But Rhoads is not the direct buyer of that division, or the four others. The company is buying them from Diesel Direct Inc., an energy company based in Massachusetts.

Diesel Direct won most of Worley’s assets in a Monday auction held to pay off some of Worley & Obetz’s $90.1 million in debt.

Among the assets that Diesel Direct will retain are Worley divisions in fleet fueling, commercial storage-tank service and heating oil.

Court records show that Diesel Direct agreed to pay $10.7 million for the assets, which is about one-third of Worley’s $30.1 million valuation as determined by the energy company itself, according to a July court filing.

Diesel Direct outbid Wiggins Gas Propane & Alternative Fuels LLC, which made an $8.1 million offer in August.

Diesel Direct, an onsite mobile fueling company, will complete the purchase during a settlement slated for Sept. 25, according to court filings.

The company will then sell the four divisions to Rhoads at an undisclosed price.

Direct Diesel said in a press release that it plans to make the former Worley & Obetz headquarters in Manheim the Diesel Direct headquarters for Pennsylvania.

“Our team is excited to expand our existing footprint in the Pennsylvania area with this acquisition. We look forward to growing our presence in the market,” William McNamara, CEO of Direct Diesel, said in a statement. 

The auction did not include Worley subsidiary Ranck Plumbing Heating AC which was sold in June for $1.6 million.

Also excluded were Worley & Obetz’s seven Wo-Go and Pacific Pride fuel stations in Manheim, Ephrata, Lititz, Lancaster, Elizabethtown, Mount Joy and Harrisburg.

Court records do not indicate the fate of the fuel stations.

The defunct energy company filed for chapter 7 bankruptcy on June 6, two days after the company and its subsidiaries shut down amid news of an investigation into alleged fraud.

In August, Worley’s former CEO, Jeffrey B. Lyons, and former controller, Karen Connelly, were charged by the Northern Lancaster County Regional Police with fraud. The investigation is ongoing. 

 

Shelby White
Shelby White covers banking and finance, law and Lancaster County for the Central Penn Business Journal. For tips, email her at swhite@cpbj.com.

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