A federal bankruptcy judge in Newark approved the sale of a troubled North Bergen trash and recycling collection station, as well as trucks and other assorted equipment, to a Florida-based firm that conducts similar collection business, for a reported $14 million in an auction conducted by the bankruptcy court.
According to information provided by the court, Bankruptcy Judge Novalyn Winfield said that the results of the auction “were far better than anticipated,” and expected the winning bidder, Eagle Recycling Inc., of Boynton Beach, Fla., to resume business at the Dell Avenue facility that housed both P&N Recycling Specialists and HC Company, both owned by brothers Patrick and Ronald Stamato, as soon as possible.
According to Vincent Papalia, the attorney representing the Stamato brothers, a “substantial portion” of the assets from the two companies was sold off at the auction and the funds recovered in the auction would enable the brothers to pay off many of the bills owed to the companies’ creditors.
But Papalia said that he was not sure whether there was enough money left over to pay the nearly 300 employees who were laid off instantly after the Stamato brothers closed up shop and filed for federal bankruptcy protection last November.
Representatives from Eagle Recycling confirmed that they were the winning bidder at the auction last week and said that they hoped to resume business operations as soon as possible, under a $10,000-a-month lease deal with P&N, while awaiting approval on the sale from the state Department of Environmental Protection.
However, Township Administrator Chris Pianese is curious as to what Eagle Recycling plans to do with their newly acquired property.
“We requested a meeting with Eagle because we want to see what their intentions are,” Pianese said. “Our concern lies with whether they want to work under the existing permit for now and whether they’re going to apply for a new permit in the future. So we want to know what their intentions are. I haven’t spoken to anyone from Eagle yet. But I think we might be a step closer to a resolution in this matter.”
The owner of Eagle Recycling, Nicholas Marangi, has operated a similar facility in Chestnut Ridge, N.Y., but this North Bergen facility will be much larger.
Assuming loans
According to the terms determined in the auction, Eagle Recycling will assume $9.2 million in state Economic Development loans, make $365,000 in overdue loan payments and will make restitution to the property taxes owned to North Bergen.
According to the court documents, the township claims to be owed $232,000 in back taxes and penalties, a total that Papalia totally disputes.
The township still has pending litigation against P&N for failing to abide by the terms of the company’s trash collection and recycling collection permits. Last summer, it was believed that P&N was bringing in more than the 353 tons allowed per day, plus it was determined that they were not regularly cleaning their trash tipping floors, which led to a host of health hazards, such as rancorous odors, insects and rodents, standing water and massive construction debris.
The facility was then ordered closed by a Hudson County Superior Court judge, but last month, Judge Thomas Olivieri lifted the order, to only collect construction and demolition debris, as long as P&N strictly followed the guidelines of the permit.
Olivieri ordered the businesses to be shut down in November when it was learned that neither company was complying with a court order to regularly clean up the collection facility.
Just two days after the judge ordered the facility to be closed, the Stamato brothers filed for federal Chapter 11 bankruptcy protection, while representatives for the brothers claimed that their clients were attempting to sell the facility as soon as possible.
HC Company was the trash collection contractor that collected either trash or recyclables for several municipalities, including Guttenberg, Hoboken, Secaucus, Union City and West New York.
Residents who lived in the general vicinity of the plant complained of foul odors, insects and rodents in the area and requested help from the Hudson Regional Health Commission, as well as the North Bergen health department.
The town filed a complaint against the Stamato brothers in November and after considering both sides, Judge Olivieri ordered the plant to be shut down until it was sufficiently cleared of excess trash and debris. Olivieri’s order also prohibited the companies from accepting any new trash until the old trash was sufficiently removed.
Since the ban to accept any trash has been lifted, both companies can now begin to accept construction debris and demolition debris, but there has been no approval to accept household trash or recyclables.
Investigations by both HRHC and North Bergen officials revealed that it did not appear as if P&N was collecting any trash over the last two months.