Court appoints receiver to manage SOBE Thermal Energy Systems

YOUNGSTOWN A Mahoning County Common Pleas Court judge on Friday granted the Public Utilities Commission of Ohio's request to appoint a receiver to manage SOBE Thermal Energy Systems, LLC, a company that provides heating and cooling services to 27 downtown Youngstown buildings.

The court’s action aims to ensure the continued utility service for downtown Youngstown customers after the company showed signs of financial instability.

Judge Anthony Donofrio issued a judgment entry granting a writ of peremptory mandamus, which orders SOBE to comply with its legal duty to furnish adequate utility services. The court also found clear and convincing evidence that SOBE is in imminent danger of insolvency, thus appointing a receiver.

The receiver appointed is Reg Martin, who previously held the role in a related case involving Youngstown Thermal Cooling, LLC, the former owner of the SOBE facility on North Avenue.

A court-appointed receiver is an impartial person or entity granted legal custody and control over a company's assets and business operations. The receiver acts under the court's authority to protect the business, often when there are concerns about its management or financial viability, as is the case with SOBE.

The receiver’s responsibilities include taking control of all SOBE’s assets, which encompass real property, equipment, and bank accounts, and operating and managing the business, including collecting revenues.

The receiver is also responsible for maintaining utility service for customers, which includes taking necessary steps before the PUCO, such as establishing rates or defending against complaints, and ensuring compliance with all state and federal regulations, including those set by the PUCO.

Financially, the receiver is authorized to pay obligations necessary for the business's operation, such as wages, taxes, and utility costs, from the company’s assets and revenues, and to borrow funds if assets are insufficient to cover necessary expenses.

The court entry specifies that the receiver is now considered a public utility subject to the jurisdiction of the PUCO and has a duty to furnish necessary and adequate service to SOBE's customers, as required by state law.

The appointment follows reports last month that equipment essential to SOBE’s operations was subject to repossession due to nonpayment, which the PUCO said jeopardized the utility’s ability to serve its customers.

The court entry mandates that SOBE and all its officers, directors, and employees must cooperate with the receiver in the discharge of the receiver’s duties.

The receiver is also required to submit regular reports to the court outlining expenses and activity. The receiver’s compensation and that of the receiver's counsel will be paid from SOBE’s assets and revenues, upon approval by the court.