Case No. RK272-04426
May 23, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Name of Applicant: Pioneer Talc Company/Zemex Industrial Minerals
Date of Filing: April 24, 1997
Case Number: RK272-04426
This Decision and Order will consider an Application for Supplemental Refund filed in the Subpart V crude oil refund proceeding by Zemex Industrial Minerals (Zemex).(1) The Application is based upon purchases of refined petroleum products made by Pioneer Talc Company (Pioneer) from August 1973 to January 1981.
In the Application, Zemex explains that it acquired the assets of Pioneer on December 1, 1994. At the request of the Office of Hearings and Appeals (OHA), Zemex submitted a copy of the purchase agreement by which Zemex, through its subsidiary Suzorite Mineral Products, acquired the assets of Pioneer. Included in the sale were such assets as: equipment, tangible personal property, leases, inventory, accounts receivable, and licenses and permits.
We have a statutory duty to identify and provide restitution to injured persons. 15 U.S.C. § 4502 (b). We would be negligent in discharging that duty if we granted a refund to someone other than an identified injured person. Texaco/Huffy Gas, 22 DOE ¶ 85,220 at 88,586 n. 4. A potential crude oil refund is not generally considered an asset that can be bought, sold or transferred, for the simple reason that the refund itself does not exist until the OHA issues a Decision and Order granting a particular refund claim. As such, the refund procedures we have established provide that the right to receive a refund generally remains with the owner of a firm during the price control period. However, we have determined that
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).
Zemex has confirmed that it acquired none of the capital stock of Pioneer pursuant to the 1994 purchase agreement. However, as stated above, we have determined that it is possible for an injured corporation to transfer its right to receive crude oil refund monies to an asset purchaser, absent a transfer of the capital stock of the corporation. The right to receive a refund is premised on the idea of providing restitution to persons that suffered injury due to alleged crude oil overcharges during the refund period. Accordingly, the right to claim status as an injured person, for purposes of the Subpart V crude oil refund proceeding, is something which can be transferred to a second party only when there is a sales agreement containing specific contractual language addressing the right to receive a crude oil refund. A thorough review of the asset purchase agreement submitted by Zemex does not show that the right to receive future crude oil refund monies due to Pioneer was either explicitly or implicitly transferred pursuant to the purchase agreement. Because Zemex has not shown that its asset purchase fulfils either requirement to transfer the right to receive refund monies due to an injured corporation, we will deny the Application for Supplemental Refund submitted by Zemex.
It Is Therefore Ordered That:
(1) The Application for Supplemental Refund filed by Pioneer Talc Company/Zemex Industrial Minerals, Case No. RK272-04426, is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: May 23, 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).