YOUNGSTOWN — With a mobile steam plant used by SOBE Thermal Energy Systems LLC to provide utilities to 27 downtown buildings in serious danger of repossession as soon as Tuesday, the Public Utilities Commission of Ohio filed a court motion requesting permission for a receiver to be appointed to take over the company’s operations.

A writ of mandamus and motion for the appointment of a receiver was filed in Mahoning County Common Pleas Court by the Ohio Attorney General’s Office on behalf of the PUCO. The legal filing is required to have the attorney general’s office appoint a receiver.

Also, Alcon Mechanical Piping Inc. of Niles, which filed a July 19 complaint against SOBE in common pleas court for nonpayment for the January 2024 installation of steam heat piping, requested a judge grant it default judgment because “SOBE has not entered an appearance (of an attorney), answered or otherwise defended the action.”

Alcon sued for $428,458, including compensatory damages after SOBE CEO David Ferro gave the company a bad check for $400,000 and “has not responded to this demand in any meaningful respect,” according to its lawsuit.

Magistrate Dennis Sarisky scheduled an Oct. 28 hearing on the motion for default.

Judge Anthony Donofrio had not ruled on the PUCO’s filing as of Wednesday.

In the PUCO filing from Julian P. Johnson, an assistant attorney general with its public utilities section, it states because of the “likely seizure” of the mobile steam plant “and SOBE’s outstanding debts, SOBE is in imminent danger of insolvency.” Because of that, “a receiver should be immediately appointed to manage all SOBE’s affairs.”

The PUCO on Sept. 18 ordered Attorney General Dave Yost to seek appointment of a receiver for SOBE because of the company’s inability to continue to provide heating, cooling and hot water services to its customers at 27 downtown buildings, including two buildings with 90 residents, without the rented mobile steam plant.

Without the mobile plant “SOBE will be unable to provide utility service to any of its customers,” according to the PUCO court filing.

Wabash Power Equipment Co., which is owed $383,214 by SOBE for nonpayment of the rented mobile steam plant, could repossess the equipment — which would shut down SOBE’s operations — as soon as Tuesday under an agreement the city of Youngstown reached Sept. 16 in court. The city agreed to pay $20,000 to Wabash, a Wheeling, Illinois, company, to keep the equipment onsite until the end of the month. The board of control will approve the payment today.

Jason Small, a Youngstown senior assistant law director for the city, said Wednesday the city was still working on a solution to keep SOBE operating.

SOBE breached a lease agreement for a steam plant at its Youngstown facility, 205 North Ave. SOBE signed a lease in November 2019 to use Wabash’s steam plant at $19,500 a month.

A federal judge ruled Jan. 29 in favor of Wabash’s motion for default judgment of $383,214 when SOBE never responded to the case. Wabash then filed May 23 in Mahoning common pleas to repossess and remove the equipment after SOBE refused many demands for the property, according to court documents.

The repossession was delayed a few times since Donofrio granted a default judgment Aug. 21 against SOBE, which didn’t respond to the lawsuit.

In that Aug. 21 ruling, Donofrio ordered SOBE within 24 hours to “cease all use and operations of the equipment and completely and permanently shut down, turn off and disconnect the equipment” and ordered the sheriff’s department to seize it.

Donofrio on Sept. 9 rejected an Aug. 29 motion by the PUCO to reopen the docket and seek a stay of execution in the case won by Wabash. Wabash had responded that it had voluntarily permitted SOBE to use its equipment until at least Sept. 16.

The city on Sept. 9 filed a motion to intervene “to ensure the health, safety and welfare of residents and businesses in downtown Youngstown,” and sought a stay of the judgment of at least 30 days.

The city’s motion, filed by Small, states: “At present, upon information and belief, the mobile steam plant is the sole means by which SOBE provides heating and cooling to its customers in downtown Youngstown; to the city’s knowledge, no other equipment owned and operated by SOBE functions to do so.”

Small wrote: “Without an alternative production method in place, if Wabash repossesses the mobile steam plant, SOBE’s residential and commercial customers will be without heat, cooling and hot water indefinitely. SOBE informed neither its customers nor the city of the circumstances of this case.”

A conference call was held Sept. 12 to discuss the motions to intervene from the city and the PUCO with Donofrio issuing a Sept. 16 judgment entry regarding the $20,000 payment to Wabash from the city and allowing Wabash to take its equipment as soon as 8 a.m. Tuesday.

That entry stated: “The city and PUCO will cease all litigation pertaining to the equipment and agree to (withdraw) all pending motions to interview with prejudice. The city agree to refrain from interfering in any way with Wabash reclaiming its equipment including, but not limited to, the filing of, in instant or any other case, any new motions or otherwise asserting any claims regarding Wabash, the equipment, or Wabash’s ownership and / or authority under this judgment entry to regain possession of equipment.”

Meanwhile, Vorys, Sater, Seymour and Pease, a Columbus law firm that represented SOBE in an Ohio Environmental Review Appeals Commission case filed by the city against the company and the Ohio Environmental Protection Agency director, asked July 15 to withdraw from the case.

Law firms typically seek to leave cases in that manner when they’re not being paid by their clients.

The city opposes SOBE’s plans to convert rubber tire chips into synthetic gas at its Youngstown facility as well as the Ohio EPA granting a permit on Feb. 14, 2024, to permit SOBE to move ahead with that plan.

The city objects to the permit and filed an appeal March 15, 2024, stating the EPA’s decision to issue a final permit “is unreasonable and lacking a valid factual foundation, and / or unlawful and not in accordance with state law.” The city asked the commission to order the state EPA director to revoke the permit.

The Ohio EPA issued an “air permit to install and operate” to SOBE to shred tires that would be converted into gas at its Youngstown plant over numerous objections from city officials and residents.

City council on Nov. 20 approved a second one-year moratorium on the process SOBE plans to use at its plant. Council members say the process is dangerous, untested and harmful to the environment. They also said they don’t plan to ever lift the moratorium that was initially passed Dec. 20, 2023.

City officials repeatedly have said the project needs approval from Youngstown for a zoning change to move forward, and they oppose that.

Opponents of the project have said the synthetic gas is toxic and a highly explosive hazardous material and that air emissions would threaten public health.

At an Aug. 6 Environmental Appeals Commission status conference, SOBE was given until Aug. 20 to file a notice of new legal counsel and all the parties were ordered to file a joint proposed case management schedule by Sept. 3.

It’s the last entry on the docket for the case though it is strongly believed that SOBE hasn’t hired another law firm. SOBE didn’t hire a law firm for the Wabash or the Alcon cases.

Based in Dublin, Ohio, SOBE acquired the former Youngstown Thermal LLC and Youngstown Thermal Cooling LLC in November 2021 for $250,000. The company had managed the facility for two years prior.

Before taking over, Youngstown Thermal had numerous problems for years operating its cooling system – leaving the handful of downtown businesses that used it without air conditioning during the summer.

Youngstown Thermal was placed into receivership in 2017 after the PUCO was informed by the company’s former CEO that the business had financial struggles that could have caused an energy crisis downtown. Youngstown Thermal couldn’t ensure adequate service to its customers and was in danger of insolvency when the PUCO stepped in.

Youngstown Thermal is the oldest district heating and cooling system in the country, having begun operations in 1895. It was designed to generate and distribute steam to heat downtown businesses using coal as its main source of fuel.