Case No. RK272-03957

September 2, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Supplemental Order

Name of Applicant: Wal-Mac Inc. d/b/a Lathem Water

Date of Filing: April 2, 1996

Case Number: RK272-03957

This Decision and Order will consider an Application for Supplemental Refund filed by Wal-Mac Inc. d/b/a Lathem Water (Wal-Mac) 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 V.A. Lathem Water Service, Inc. (V.A. Lathem).

According to Wal-Mac’s request for supplemental refund, Wal-Mac purchased all V.A. Lathem’s assets and trade name effective March 23, 1985. V.A. Lathem then dissolved. On April 21, 1998, OHA contacted Wal-Mac by telephone to determine whether Wal-Mac had purchased V.A. Lathem’s stock or whether the Asset Purchase Agreement between the parties implicitly or explicitly conveyed the subject refund to Wal-Mac. Wal-Mac’s Vice President, Harold Hooten, advised that he was uncertain whether Wal-Mac had purchased V.A. Lathem’s stock in 1985. OHA subsequently requested in writing that Wal-Mac provide OHA additional information regarding any stock conveyance from V.A. Lathem to Wal-Mac and/or the terms of the Asset Purchase Agreement between the two parties. OHA never received any oral or written communication from Wal-Mac on these issues.

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; 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).

In this case, the record is devoid of any evidence that Wal-Mac purchased V.A. Lathem’s capital stock. Moreover, Wal-Mac has not provided any evidence that the Asset Purchase Agreement between the parties transferred the right to the subject refund to Wal-Mac. As such, it appears that the owners of the V.A. Lathem’s capital stock may not have relinquished their right to receive the supplemental crude oil refund based on the V.A. Lathem’s petroleum purchases during the price control period. We will therefore deny the Application submitted by Wal-Mac.

It Is Therefore Ordered That:

(1) The Application for Supplemental Refund filed by Wal-Mac, Inc. ad/b/a/ Lathem Water Service, Case No. RF272-03957, 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:September 2, 1998

(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).