Crossville Chronicle, Crossville, TN

Area News

July 25, 2013

TSUD: too many questions to return sewer

There's too many unanswered questions for the commissioners of Tansi Sewer Utility District to feel comfortable turning over operation and ownership of the Tansi sewer system, the commissioners said Monday.

"I don't feel good about giving the system back when there are customers depending on us," said Virgil Ferguson, TSUD commissioner.

During the recent mediation conference at Brown Elementary School, bankruptcy trustee John McLemore of Cookeville explained options available to recoup assets of Tansi Waste Management, Inc., which has filed for Chapter 7 bankruptcy protection.

"Tansi Waste Management, Inc. was loaned money, an unsecured loan, by the [Lake Tansi P.O.A.] to build a sewer system. The sewer system is built and it is currently operating. It has been conveyed to [Tansi Sewer Utility District]. TSUD did not pay anything for it," McLemore said during the mediation conference.

Bankruptcy law allows for the transfer of an asset from an entity to be voided if the transfer was for less than adequate consideration and took place within four years of an entity filing for bankruptcy protection. McLemore explained TSUD could return the sewer system back to TWMI or wait for him to file suit seeking recovery of the asset.

At Monday's special-called meeting of the TSUD board, TSUD attorney Randol Boston said he did not have the information he felt necessary to properly advise the board on a course of action. He did ask the board to consider allowing him to provide information and confer with H.G. Pick, Crossville bankruptcy attorney, and to confer with McLemore on possible action by the bankruptcy trustee.

"We're still in a hurry up and wait type situation," Boston said. "I don't have the information available to me yet to advise this board."

Ferguson noted TSUD had offered to return the sewer plant to TWMI and, ultimately, the Lake Tansi POA shortly after the POA filed suit against TWMI and TSUD for default of the loan made by the POA to TWMI to build the sewer system.

"Nothing ever happened with that," Ferguson said.

The primary question the board had centered on who would operate the sewer system and serve those customers currently being served by the sewer service, including RCI and POA, the largest commercial customers. Ferguson was concerned someone could purchase the sewer system and salvage equipment and materials from it but not continue operating it.

Trey Kerley, president of the TSUD commissioners, said, "We're concerned with who will take care of the customers and the people out here. We don't want anybody taken advantage of."

"I don't see anybody purchasing this to make it a viable operation," Ferguson said. "The only ones I can see it being an asset to are RCI and the POA."

The situation poses unique legal questions, Boston told the board, and he had difficulty finding similar situations in Tennessee case law. While utility districts had declared bankruptcy in the past, TSUD was not insolvent, Boston said, and was not seeking bankruptcy protection itself.

"They are trying to take our assets," Boston explained.

If TWMI's bankruptcy trustee filed to have the sewer system returned to the TWMI bankruptcy estate, TSUD could object.

Ferguson said he did not believe the transfer of the sewer system to TSUD was fraudulent because the district had a bill of sale. That bill of sale conveyed the sewer treatment facility and infrastructure, which was valued at between $700,000 and $800,000 in an appraisal last year, for $10 and "other valuable consideration."

Pick explained proving the conveyance of the assets, the sewer system, was done with "valuable consideration" was but one hurdle in proving the transfer of property was legal. There was also the need to show there was proper documentation of any financing and that property was properly secured.

"Otherwise, it's no different than a doctor bill or a credit card," Pick said.

If the court returned the sewer system to TWMI, McLemore would then be charged with liquidating the asset and selling it to the highest bidder.

"Could someone buy it you don't like? That's possible," Pick said. "But it's not true someone could buy it and not operate it properly because of the environmental rules and regulations."

He also noted that TSUD could place a bid to purchase the system if it were returned to TWMI and sold at public auction.

Pick noted the bankruptcy trustee only had an interest in lawsuits that named TWMI in the litigation.

"It's my understanding there's lawsuits all over the place," Pick said.

1
Text Only
Area News
  • Hwy. 70 crash.jpg CCHS student dies in car crash

    Crossville Police have identified the victim of a two-vehicle collision that occurred Tuesday morning on Hwy. 70 W at the intersection of Dillon St. as a sophomore at Cumberland County High School.

    April 22, 2014 1 Photo

  • IMG_0783.JPG Visitors center now open to the public

    A ten-year effort to establish a gateway to the Big South Fork National River and Recreation Area, as well as to point tourists and visitors to the many other area parks, historical sites and points of interest, concluded Thursday as the community gathered with officials from the city of Crossville, Cumberland County, the Crossville-Cumberland County Chamber of Commerce and the National Park Service to dedicate the Crossville-Cumberland County: Gateway to the Big South Fork Visitors Center on River Otter Dr.

    April 22, 2014 2 Photos

  • Shots fired during standoff over domestic situation

    Chickens were killed, threats of bodily harm made and at least three shots fired in the presence of a Cumberland County sheriff's deputy during a domestic dispute between an uncle and nephew.

    April 22, 2014

  • Jury selection set in Batty slaying

    Jury selections were scheduled to begin today in the trial of John Russell Giles of Hampshire Lane, Fairfield Glade, charged in connection with the Nov. 7 death of Kimberly Ann Batty, 58, of Dovenshire Dr., also Fairfield Glade.

    April 22, 2014

  • Thoughts for this holy time of Easter

    The first performance of George Friderick Handel's masterpiece, "Messiah," was given in Dublin, Ireland, on April 13, 1742, where it was well received. When it was performed in England there were criticisms of the music, performers and location of the performance. It was held that the subject matter was too exalted to perform in an opera house, but rather it should be performed in church. Wouldn't it be interesting if we knew how many times this magnificent music has been performed in the past 272 years?

    April 22, 2014

  • Joe Goodwin.JPG Warden Joe Goodwin remains a true original

    The Tennessee Wildlife Resources Agency celebrates its 65th anniversary this year, and Crossville's Joe Goodwin is part of that living history.

    April 21, 2014 1 Photo

  • Fleeing shoplifter causes $30,000 in damage

    A Morgan County man fleeing from the scene of a $4.99 shoplifting incident allegedly backed his vehicle into a light pole, destroying a solar power system and causing nearly $30,000 in damage.

    April 21, 2014

  • Policy looks at e-cig use

    A new nicotine delivery method has the Cumberland County Board of Education looking at changes to its tobacco-free schools policy to ensure a loop-hole doesn't exist.

    April 21, 2014

  • rendezvous.jpg TSRA starts spring off with paddling trips

    About 150 members of the Tennessee Scenic Rivers Association (TSRA) recently gathered April 2-6 in Crossville at Camp Nakanawa for the Annual TWRA Rendezvous.

    April 19, 2014 1 Photo

  • Panel recommends using third-party billing for old EMS bills

    The budget committee approved hiring the same third party billing company to help go through older EMS ambulance service bills to resubmit them to help the EMS department get caught up with billing collections.

    April 19, 2014

Marketplace Marquee
Parade
Must Read
Section Teases
Seasonal Content
AP Video
Bon Jovi Helps Open Low-income Housing in Philly Pipeline Opponents Protest on National Mall Hagel Gets Preview of New High-tech Projects S.C. Man Apologizes for Naked Walk in Wal-Mart New Country Music Hall of Fame Inductees Named 'Piles' of Bodies in South Sudan Slaughter New Yorkers Celebrate Cherry Blossom Blooms SCOTUS Hears Tv-over-Internet Case Justice Dept. Broadening Criteria for Clemency Chief Mate: Crew Told to Escape After Passengers 'Miss Meadows' Takes Holmes Back to Her Roots Biden: Russia Must Stop Talking, Start Acting David Moyes Out As Manchester United Manager Raw: Leopard Bites Man in India Iowa College Finds Beauty in Bulldogs High Court to Hear Dispute of TV Over Internet Stowaway Teen Forces Review of Airport Security
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Weather Radar
2014 Readers' Choice