Case No. RK272-04007
January 23, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Name of Applicant: Ward Transport, Inc./William R. Ward
Date of Filing: October 9, 1996
Case Number: RK272-04007
This Decision and Order will consider an Application for Supplemental Refund filed in the Subpart V crude oil refund proceeding by William R. Ward.(1) The Application is based upon purchases of petroleum products made by Ward Transport, Inc. from August 1973 to January 1981.
In the Application, Mr. Ward writes that Ward Transport, Inc. was sold to another company, Becker Corporation, on June 30, 1989. In a telephone conversation with Office of Hearings and Appeals (OHA) Staff Analyst Matthew Comeau on October 31, 1996, Mr. Ward confirmed that he sold all the capitol stock of Ward Transport, Inc. to Becker Corporation at that time.
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. Therefore, 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. 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).
Mr. Ward has confirmed that he sold all the capitol stock of Ward Transport, Inc. to Becker Corporation on June 30, 1989. However, Mr. Ward claims that he is still entitled to receive supplemental crude oil refund monies due to the corporation, despite the fact that he sold all the stock of the corporation. In support of this argument, Mr. Ward submitted a copy of the stock purchase agreement (Agreement) between Becker Corporation and himself.(2) In a letter accompanying the Agreement, Mr. Ward directs our attention to a specific portion of the Agreement that he believes entitles him "to receive the assets and liabilities of Ward Transport, Inc. prior to closing on June 30, 1989 as they might become apparent and adjusted after that date." (3) We have reviewed the portion of the Agreement to which Mr. Ward refers in the above-mentioned letter, and find it insufficient to establish that Mr. Ward retained the right to receive crude oil refund monies due to Ward Transport, Inc. after he sold the capital stock of the company. The language in that portion of the Agreement deals specifically with the value of the company on the closing date, and arranges for the payment of either deficiency or excess payments if the company's audited, post-closing value differed significantly from its estimated value as of June 30, 1989. There is no mention of either future crude oil refunds, or of the disposition of any future assets of the corporation that may come into existence after the closing date. In reviewing the remainder of the Agreement, we have found no other provision that would indicate that Mr. Ward retained the right to receive future crude oil refund monies due to the corporation. We have, therefore, determined that Mr. Ward relinquished his right to receive future crude oil refund monies due to Ward Transport, Inc. pursuant to the 1989 Agreement. Accordingly, we will deny the Application for Supplemental Refund submitted by Mr. William Ward.
It Is Therefore Ordered That:
(1) The Application for Supplemental Refund filed by Mr. William Ward, Case No. RK272-04007, is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: January 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).
(2) See "Stock Purchase Agreement By and Among Becker Corporation, William R. Ward and Sharon Ward" submitted by Mr. Ward in support of his Application for Supplemental Refund, Case No. RK272-04007, on November 13, 1996.
(3) See Letter from Mr. Ward to the Office of Hearings and Appeals, dated November 6, 1996.