Case No. RK272-04127

March 3, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Supplemental Order

Name of Applicant: Indiana Brass, Incorporated

Date of Filing: January 23, 1997

Case Number: RK272-04127

This Decision and Order will consider an Application for Supplemental Refund filed by Indiana Brass, Incorporated (IBI) in the Subpart V crude oil refund proceeding being conducted by the Office of Hearings and Appeals (OHA). (1) The Application is based upon purchases of refined petroleum products made by another corporate entity named Indiana Brass.

IBI's Controller, Dennis Bulington, explained the complicated corporate evolution and demise of Indiana Brass as follows. The company began operating in 1911, underwent a Chapter 11 Bankruptcy proceeding in 1986, and emerged as another company, INBRACO, a subsidiary of U.S. Tap, Inc. In 1996, U.S. Tap, Inc. dissolved, selling its assets only to NeoCorp. NeoCorp, in turn, incorporated a new entity called Indiana Brass, Incorporated. According to Mr. Bulington, the Asset Purchase Agreement between U.S. Tap, Inc. and NeoCorp. transferred neither stock nor the rights to any crude oil refund to NeoCorp or its subsidiary, IBI.

OHA has a statutory duty to identify and provide restitution to injured persons. 15 U.S.C. § 4502(b). The Office would be negligent in discharging that duty if it granted a refund to someone other than an identified injured person. Texaco/Huffy Gas, 22 DOE ¶ 85,220 at 88,586, n.4 (1992). Therefore, the refund procedures the Office has 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; (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).

In this case, neither IBI nor its parent, NeoCorp, purchased any of the capital stock of Indiana Brass or its parent, U.S. Tap, Inc., pursuant to the 1996 Asset Purchase Agreement. Moreover, IBI's Controller relates that the right to receive future crude oil refund monies was not included in the

Asset Purchase Agreement.(2) As such, U.S. Tap, Inc., the owners of the capital stock of Indiana Brass, did not relinquish their right to receive the supplemental crude oil refund based on the company's petroleum purchases during the price control period. We will therefore deny the Application submitted by Indiana Brass, Incorporated.

It Is Therefore Ordered That:

(1) The Application for Supplemental Refund filed by Indiana Brass, Incorporated, Case No. RF272-04127, be and hereby is denied.

(2) This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: March 3, 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)In fact, IBI's Controller stated that he did not believe IBI was entitled to the supplemental refund. See Memorandum of Telephone Conversation between Ann Augustyn, OHA Attorney, and Dennis Bulington, IBI Controller (February 24, 1997).