By Jimmy Hancock
Oct 25, 2013
Hoku Materials plant in Pocatello.
POCATELLO — The fate of the Hoku Materials plant in Pocatello, and just who will own what when the dust settles, is now in the hands of the U.S. Bankruptcy court after an online auction of the company’s assets was completed on Thursday. Buyers had two options, to bid on purchasing the Pocatello Hoku plant in its entirety, or bidding on it by the piece, which could lead to the plant being dismantled.
David Barkoff, director of sales for Heritage Global Partners, the company hired to conduct the auction, said both options were provided to maximize the potential funds earned. Early Thursday afternoon he said that the 179 certified bidders were vigorously going at it. “The current aggregate auction number has surpassed the bulk figure,” Barkoff said at approximately 1:30 p.m. with several hours to go in the auction of individual lots. The two day auction began on Wednesday with bidders able to take a shot at owning Hoku Materials Pocatello assets as a whole, in the bulk auction, or by the piece, through one of 1,364 individual lots.
The bulk auction, or the attempt to purchase the plant as a whole unit, ended Wednesday with a top bid of $3.7 million. Barkoff could not disclose who that bidder was. While the individual lots also went up for sale on Wednesday, many were still open for bidding Thursday afternoon. As of 1:30 p.m. on Thursday, about 500 of those lots had been closed, with more than 800 lots still receiving active bids. Barkoff said he was not surprised by the consistent bidding traffic, saying that Heritage Global has a substantial industry following. He said the 1,364 lots received more than 60,000 views online.
The combined total figure for bids received on the individual lots had already surpassed the $3.7 million top bid for the assets as a whole. But Barkoff did say that it doesn’t necessarily mean the plant will be pieced out. “That’s something the judge will have to decide,” he said. According to Barkoff, the final auction figures will be handed over to the trustee of Hoku’s bankruptcy proceedings and that trustee will then make recommendations to the judge. A final disposition of the assets is expected to be revealed during a Nov. 12 hearing in Pocatello.
Hoku filed the Chapter 7 bankruptcy in July and a decision was made last month by U.S. Bankruptcy Judge Jim Pappas to sell the facilities at auction. Knowing the auction would not likely fetch the funds needed to recoup creditors, one of the larger ones, North Carolina-based Industrial Piping Inc., sent a letter to the U.S. Trade Representative seeking help. The letter essentially urged the federal agency to look into the millions of dollars owed by Hoku parent company Tianwei New Energy Holdings, a China-based company. “Tianwei is operated by key Chinese government officials and had revenues of $44 billion in 2011,” Industrial Piping wrote in it’s release, later stating that, “Tianwei owns a majority stake in Hoku and is one of several large companies controlled by the government of China. As of today, Hoku/Tianwei owes at least $100 million to various U.S. companies for work and goods furnished in good faith without pay.”
Industrial Piping said Tianwei has at least $100 million approved and available in Chinese banks to be paid out for the Pocatello facility and they are entitled to be paid for the services they provided. In Wednesday’s Journal, Industrial Piping and several other creditors were part of a full-page advertisement that featured an open letter to Tianwei, urging the company to live up to the promises made when the debt was incurred.