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S&T asks to repossess vehicles from Worley estate

S&T Bancorp Inc. is asking the U.S. bankruptcy court for permission to repossess seven commercial vehicles the bank said it helped finance for the now-bankrupt Worley & Obetz.

The request marks one of the first admissions by S&T that it was among the lenders to Worley & Obetz, which filed for bankruptcy shortly after closing its doors last month. 

In a court filing, S&T said it loaned $4 million to Worley & Obetz and an additional $638,194.89 for vehicles. 

Representatives from S&T were not immediately available for comment.

Worley & Obetz used the loans from S&T to buy seven vehicles between January and April, according to S&T’s court filing, made in U.S. Bankruptcy Court for the Eastern District.

The original $4 million loan was made to Worley by S&T in October 2017, the filing said.

Here are the details about the vehicles:

  • In January, the bank extended a $67,800 loan to Worley for the purchase of a 2007 Heil Tanker, a fuel truck, the filing said. Worley & Obetz still owes the bank $62,737.42, the filing said.
  • In March 2018, S&T advanced $252,210 to Worley & Obetz for the purchase of two 2019 Peterbilts, heavy-duty tractors. The energy company defaulted on that loan, the filing said, and owes the bank $253,318.41.
  • In April, S&T lent Worley $130,472.89, which was used to purchase two 2018 Ford 350 pickup trucks, according to the filing. Worley & Obetz owes the bank $128,861.27, the filing said.
  • Later that month, S&T Bank advanced Worley & Obetz $187,712, which it used to purchase two 2019 Heil Tank Trailers, used to haul fuel. Worley & Obetz owes $185,267.54 on that loan.

To secure repayment, Worley & Obetz granted S&T a first priority lien and security interest in all of the equipment, the filing said.

The bank has not generally disclosed its relationship with Worley & Obetz. But in a filing with the U.S. Securities and Exchange Commission, S&T said it is exposed to a credit loss “arising from a participation loan agreement with a lead bank and other participating banks, all of which extended multiple credit facilities to a single, large commercial customer.”

The bank, based in Indiana County, said it expected a loss from the bad loan of between $4.5 million and $5.4 million. 

Despite the bad loan, the bank reported healthy earnings of $21.4 million for the second quarter of 2018, compared to last year’s second quarter earnings of $22.8 million

Fulton Bank is the lead bank in the participation loan. It recently filed a complaint that, in part, accuses the former CEO of Worley & Obetz of fraud.

Franklin Financial Services Corp. was also a lender.

Univest Corp. of Pennsylvania was also identified as a lender in court records associated with Worley & Obetz’s bankruptcy filing.

Editor’s note: This story has been updated from its original version to show S&T’s second quarter earnings.

 

Shelby White
Shelby White covers banking and finance, law and Lancaster County for the Central Penn Business Journal. For tips, email her at [email protected].

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