COOPERSVILLE An environmental consulting firm based in West Michigan has filed for Chapter 11 bankruptcy to position itself to sell to an industry rival.
Superior Environmental Corp.Filled with the U.S. Bankruptcy Court, Western District of Michigan, on February 25, under Subchapter V (a variation of Chapter 11) to expedite the process.
Superior Environmental, based in Coopersville, cited extreme staff turnover as well as hardships related to the COVID-19 pandemic for its dwindling revenue. A judgment in a case brought by a former client has also led to a $584,000 payment to the company.
Superior Environmental filed for bankruptcy in 2012 with $1.29m in liabilities and $1.28m in assets. The company employs 18 employees, two part time workers, and several contractors. The company’s biweekly payroll is approximately $42,000.
Superior Environmental Chief Opera Officer Jeff Skendrovic was sworn to in a February 28 sworn declaration. He has been with the company for 32 year and described how the company plans to liquidate all non-cash assets. AKT Peerless Environmental Services LLCSection 363 sale: $250,000
Skendrovic stated that the company’s board of directors looked for a strategic buyer after receiving a letter from AKT Peerless. Skendrovic stated that he expects the sale to close quickly and that AKT Peerless will have the option of hiring Superior employees and taking over existing projects such as accounts with companies like AT&T and the state of Michigan.
Barrage of hardships
Superior Environmental earned $7.5 million in revenue at its peak in 2016, when it was worth $7.5 millions. This declined to $2.67 Million in 2021, and $114,147 in 2022. The bankruptcy filing brought down the total.
Skendrovics sworn declaration outlined the obstacles that have hampered the company’s progress since 2016, when it had a record year.
Superior, which has offices throughout Michigan, Connecticut, Illinois, lost its staff in 2017.
Pandemic-induced market pressures were also mentioned by the company as a reason for the company’s plummeting revenue. These included inflation, talent shortages, and the fact Superior could not move forward with projects for businesses that were deemed necessary during periods of shutdown for a period.
C.A., a former client, filed a 2018 lawsuit against Murphy Oil. This was the final blow to the company’s solvency. According to the filing, Murphy Oil was sued for alleged breaches of contract. The allegations date back to 1990.
Murphy was awarded $584,000. Following the legal decision, several key staff members resigned, including the CEO of Superiors Connecticut Office and key personnel from Superiors Connecticut Office.
Superior Environmental had to look for a strategic buyer because selling would have allowed parties with priority claims to be fully paid. Parties with non-priority, unsecure claims will also be eligible for distributions of greater than 50%.
The top unsecured creditors are not only the members of Superiors ESOP who have vested stock payments, but also a number of sub-15,000 unsecured claims. Murphy Oil($584,000), U.S. Small Business Administration ($43,347) and Bowling Green. Environmental Recycling Group ($21,094).
Superiors’ emergency motion was heard by a judge on Tuesday. He granted the company the right of cash collateral to pay employee obligations, and to continue employee benefits programs. The company will continue to pay salaries, rent, and utilities, anticipating a small amount of loss between filing its petition, and selling the business.
Grand Rapids-based attorney Steve Bylenga CBH Counselors and Attorneys PLLCSuperior Environmental is represented by him and he declined to comment further on the matter.
