As its executives prepare to be sentenced for stealing, Municipal Energy Managers Inc. seeks protection from creditors and customers.
A Chapter 7 trustee has been appointed to administer the case, filed in U.S. Bankruptcy Court in November, outlining a business with few assets, piles of unpaid bills and looming civil lawsuits from municipalities throughout eastern Pennsylvania.
A Northampton County jury last week found former company officials P.J. McLaine, 66, of Elmhurst, and Robert J. Kearns, 49, of Scranton, guilty of felony theft charges related to their failure to carry through on their promise to buy streetlights for Bethlehem Twp. from PPL in 2007, pocketing the $832,460 in taxpayer money meant for the purchase of the lights.
In its bankruptcy, MEM claims $2.3 million in assets and $8 million of liabilities. The assets are even thinner than that figure. Other than a broken truck and used office furniture valued at $7,000, the other MEM assets are receivables - paper assets - money the company claims it is owed. For example, they claim PPL Electric Utilities owes them more than $500,000, which PPL disputes, and that John P. Kearney & Associates owes them $450,000.
Among the liabilities are scores of civil lawsuits and judgments against the company. The schedule lists 70 creditors of unsecured non-priority claims from which MEM seeks protection. Modest claims include "Magistrate Alyce Hailstone" for $335 in parking fines and $6,240 owed to Barry's Sunoco in Scranton.
Large claims are listed from municipalities, including Hampden Twp. seeking $1.3 million, Manheim Borough's $561,600 claim, and Bethlehem Twp.'s $832,460. Other municipalities listed as creditors include Coaldale borough ($133,300), Coplay borough ($160,000), Cumru Twp. ($237,612), Elizabethtown borough ($423,500), Jim Thorpe borough ($297,461) and Lansford borough ($249,525).
MEM attorney in the bankruptcy, Mark Conway, said MEM's bankruptcy is straightforward.
"A company ran out of money and couldn't pay its bills," he said.
What emerged during the Northampton County criminal trial, looked much different. Prosecutors painted a picture of two men who bilked their company and didn't intend to provide the service it offered municipalities to purchase, maintain and operate utility poles and lights at a supposed savings.
Contact the writer: dfalchek@timesshamrock.com