USA Springs bailout delayed again
Wednesday, December 21, 2011
Money to bail out USA Springs still has not arrived, forcing creditors to consider alternatives, including liquidation and foreclosure.
Malom Group AG — the bankrupt company’s Swiss financier – was supposed to deposit $7 million on Dec. 9 into the account of USA Springs, which is trying to build a controversial bottling plant near the border of Nottingham and Barrington.
The payment was supposed to be the first installment of a $19.3 million bridge loan as part of a $60 million financing deal.
But USA Springs told the court on Dec. 15 that the money hadn’t arrived, making it Malom’s fourth missed deadline since Oct. 3.
Attorneys for USA Springs asked for a new deadline of Jan. 6, and the judge agreed to the extension, which is the fifth since the company filed for Chapter 11 protection in 2008.
A hearing on other issues — such as attorneys’ compensation — was set for Jan. 26.
An unnamed insider investor, with the bankruptcy court’s protection, has paid Malom a $1.2 million loan fee, a fee that was supposed to be paid back at closing, along with a potential $600,000 success fee.
If Malom doesn’t come through with the initial financing, the bankruptcy court – in its order – said it would seek the full $60 million from the firm.
Jan. 26 will also be set aside for consideration of a motion filed by Save Our Groundwater, an organization that opposes the USA Springs proposal and is seeking more documents on the redacted agreement between Malom.
USA Springs has spent $17 million over the past decade trying to get a permit to withdraw 300,000 gallons a day from the groundwater in the face of tenacious opposition from SOG and other opponents.
But shortly after the state granted the major permits, the company ran out of money, and the half-finished project has languished ever since. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW