Cleanup Contractor Says D&L Near Bankruptcy
YOUNGSTOWN, Ohio – Sunpro Inc., the company contracted by D&L Energy to clean up wastewater dumped into a tributary of the Mahoning River, is suing D&L and its president, Nicholas C. Paparodis, for more than $1 million in damages in Mahoning County Common Pleas Court, documents show.
Sunpro has also asked the court for an injunction to halt D&L from selling its assets, specifically its interest in an injection well in North Lima.
In the complaint, Sunpro alleges that D&L informed the company that it plans to file Chapter 11 bankruptcy, and that it intended to go forward with the sale of the injection well before it filed.
Both the complaint and the injunction request were filed March 15.
Ben Lupo, the former president and owner of D&L, was not named in the lawsuit.
Lupo and another company he owns, Hardrock Excavating, were charged in federal court last month for violating the U.S. Clean Water Act. Another party, Michael Guesman, a former employee of Hardrock, is also charged.
Both have pleaded not guilty.
D&L Energy contracted Sunpro to clean the tributary and portions of the Mahoning River after it was discovered that a Hardrock employee illegally discharged drilling wastewater into a storm drain on D&L's property, the complaint said.
The wastewater flowed into the tributary and then into the Mahoning.
According to court documents, D&L retained Sunpro Feb. 1, which responded immediately. At times, the company staffed workers at the site 24 hours a day.
The company says in its complaint that D&L promised to pay for the cleanup, and Sunpro provided more than $1 million worth in services. Sunpro alleges that it's been paid just $175,000.
Sunpro alleges that D&L represented that the company was entirely solvent, that D&L would pay for all services Sunpro provided, and that D&L would sell its injection well in North Lima for $1.8 million, the complaint says.
The proceeds of the sale would pay Sunpro, and D&L would provide collateralization documents and a security agreement affirming Sunpro's rights to D&L's interest in the injection well, court papers say.
But on March 11, counsel from D&L informed Sunpro that D&L refused to execute the collateralization agreement and that the company would file Chapter 11, court papers say.
Sunpro has filed for an injunction to stop the sale without any security agreement in place, saying it would result "in a present danger that the property will be immediately disposed of and placed beyond the reach of D&L's creditor, Sunpro."
The complaint noted that Paparodis informed Sunpro that he needed to raise more than $500,000 for the criminal defense of Lupo.
"As a proximate result of the defendants' fraudulent misrepresentations, unjust enrichment, and otherwise wrongful conduct as alleged, defendants should have no legal or equitable right, claim or interest in or to the full amount of the proceeds from the sale of D&L's interest in the North Lima Disposal Well #4 LLC, and/or the injection well," the complaint reads.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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