Trash Hauler May Be Put on Auction Block

A federal bankruptcy judge said Friday she would put eastern Ventura County’s largest trash hauler on the auction block if company officials could not meet a December deadline to come up with an acceptable plan of reorganization.

Over the objections of G. I. Industries’ attorneys and more than 70% of the company’s shareholders, Judge Robin Riblet said she was inclined to let the company be auctioned off just to get it out of the bankruptcy courts, where it has been stuck for more than three years.

News of the possible sale of the company--which has exclusive contracts to pick up rubbish for about 40,000 customers in Simi Valley, Thousand Oaks and Moorpark--attracted the nation’s largest waste-handling companies.

Attorneys for the industry’s two largest firms--Waste Management and Browning Ferris Industries--attended Friday’s U. S. Bankruptcy Court hearing in Santa Barbara, and both representatives expressed their company’s interest in possibly buying G. I. Industries.

“That’s all we’re saying, that we are interested in the possibility of buying the company,” said attorney Dale Bratton, representing BFI.

G. I. Industries, expected to generate revenues in excess of $19 million this year, has already attracted a bid of $24 million, and industry officials say if the firm is put up for sale it could start a bidding war driving the price up to nearly $30 million.

Any change in ownership should not affect service or rates set in contracts with G. I. Industries, said Ron Durkin, a court-appointed trustee who has proposed the sale.

But questions remain over whether the contracts, which give G. I. Industries the exclusive rights to pick up trash in the three cities and parts of the unincorporated areas of eastern Ventura County, can be sold along with the company.

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Donald Hurley, Ventura County assistant county counsel, said it was the county’s position that the contracts do not automatically transfer to whoever purchases the company.

A letter sent to the judge by officials from Simi Valley, wherI. Industries has the exclusive right to pick up rubbish until 2003, outlined three points of concern.

Although the city’s contract with G. I. Industries does have a provision granting the City Council the right to approve any transfer to a new company, the council cannot object if the new company can show it is qualified to pick up trash and has the financial wherewithal to do the job, said Joe Hreha, a deputy director of the city’s Environmental Services Department.

In the letter, it was also noted that Ventura County has an ordinance forbidding a company that operates a landfill in the county to also haul trash here.

Because Waste Management owns the Simi Valley Landfill, that would seem to preclude it from taking over G. I. Industries’ waste-hauling contracts, Hreha said.

G. I. Industries filed for bankruptcy protection in August, 1992, after losing several million dollars on failed attempts to diversify its business holdings.

The company has since sold off its unprofitable subsidiaries, cut staffing and focused its operations solely on picking up commercial and residential trash in eastern Ventura County and parts of L. A. County.

But the company has been unable to shake several lawsuits that hold it liable for many millions of dollars--including a claim by Western Waste, a San Fernando Valley-based rubbish company, that G. I. Industries owes more than $5 million.

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I. Industries’ officials say they now have the money necessary to pay off Western Waste, but are hamstrung because of another larger litigation by the Benedor Corp. That company is suingI. Industries’ subsidiary, Conejo Enterprises, for more than $40 million, a figure that Benedor says it is owed because of a breach of a 20-year contract to recycle green waste for G. I. Industries.

Marc Bielenson, an attorney for G. I. Industries, said Friday that the company now has a reorganization plan that addresses both of those issues and thus can be approved by the court. He argued strenuously against the sale.

“Why now?” Bielenson asked the judge. “Why do they want to sell the assets of a thriving entity, with $4 million in the bank, that is making $100,000 a month?”

Judge Riblet told Bielenson that on Dec. 7 he would get a chance to present G. I. Industries’ plan to reorganize the company and settle the claims against the company. If that plan is not approved, Riblet said she would set a Dec. 15 sale date.