Thousands of heating oil customers left out in cold in fight for refunds
SEATTLE - One of Washington State's largest home heating oil companies - at the time it was heading toward bankruptcy -- was actively soliciting advance payments for oil that would never be delivered.
A KOMO 4 Problem Solvers investigation found big corporations have now been fighting over Pettit Oil Company assets while regular customers are, so far, being left out in the cold and not even notified by the bankruptcy trustee.
Vera Conley's furnace shut down in the dead of winter when she says it was 30 degrees outside, and dropped to 40 degrees inside. "I'm 93 years old!" she declares with the vigor of a person half her age.
She was stunned to learn she'd run out of heating oil. "I was just devastated. I figured, I never figured I'd go on empty." She figured that, because she says Pettit oil pressured her into recently increasing her monthly "budget plan" payment, paying $735 in two checks for her monthly payment in advance of actually getting her oil accruing credit of $2833.89, shows her invoices.
"I said 'well, I've got a credit of $2000! Why would I pay?' She said 'well, ya have to pay it!' said Vera recounting a contentious phone conversation she had with Pettit. "And so that would take my whole social security check."
It says on her invoices that Pettit Oil received her most recent payment January 21st - four days after they'd gone out of business. Her furnace stopped because Pettit never told Vera they'd gone out of business and that their oil truck would not be coming.
"And I still ain't got a hold of those people yet," she says in exasperation. "I just get letters and stuff! They haven't even warned me they were out of business!"
The KOMO 4 Problem Solvers found customers throughout Pettit's service area centered on the Olympic Peninsula and Kitsap Peninsula from Hoquiam to Port Angeles to Tacoma, who say Pettit urged them to pay for oil in advance of delivery at the very time Pettit was heading toward bankruptcy on November 25th and out of business January 17th.
"Instead of sending me a bill, they should send me my check," says Pettit customer Bob Knoll. "It's my money! It's not their money." His invoice says he's owed $1,245.72.
Pam Bilodeau is another angry Pettit customer and says much the same thing. "I don't owe you any money. You owe me oil." Bilodeau's invoice says she's owed $931.55. She filed a complaint with the Washington Attorney General's office alleging what she called "fraudulent activity" asking the A.G. to review what happened - and they tell KOMO 4 that they are working directly with the federal judge overseeing the case.
"I really want this company - or at least the officers who run the company - investigated for fraud," she says.
We went to Pettit's Lakewood, Washington headquarters: empty.
Their Port of Tacoma offices: on the market.
Their Bremerton facility: padlocked. Trucks, idle. But on the day we were there, the office lights were on. We could see people inside.
"Hello!? Pettit Oil?!" we asked from the street. "It's KOMO 4. Could you come talk to us please?"
Instead, they began covering up windows with sheets of paper. They complained to police, and put up more paper over the windows.
Pettit's President was Jim Tener. We went to a gated community in Gig Harbor where records show he owned a home and learned he'd just sold that home and moved.
Company owner Norman Sather lives in Pierce County and did not return inquiries.
His son Chris Sather was Senior Vice President, and became president after Tener left and the company entered bankruptcy protection, according to company documents. We left messages at his South King County home but didn't hear back.
Various sources familiar with the Pettit case say the 75-year-old company ran into financial trouble last year when it bought SC Fuels, a larger competitor, but failed to also secure a larger operating line of credit. The sources say Pettit may HAVE been pushing for more advance payments from customers in order to expand cash flow and avoid insolvency.
Bankruptcy documents obtained by the KOMO 4 Problem Solvers lists Pettit's assets at $18,689,902.04, less than what it owes. We found a long list of corporations - banks, lawyers, oil companies - lining up for money owed them by Pettit.
Even Pepsi got on the list, owed $1,102.34. So did Fritos, owed $580.99 - quite possibly for vending machines. And Jim Tener, the former president? He got on the list because he's owed $34.35.
Yet nowhere did we spot a single reference to all those home heating oil customers like Arlene Payne who believes the big companies get all the attention in bankruptcy court.
"Money sure does talk!" says the wry senior on a fixed income.
Bankruptcy court rules say "secured creditors" get paid first - generally companies that previously arranged for collateral like real estate. Then, the second category includes those who gave Pettit money during the 53-day bankruptcy. Third, "priority" creditors, which is supposed to include home heating oil customers with a credit. But they've not been told that.
We went to federal bankruptcy court where corporate lawyers have been negotiating for Pettit's assets for months.
Kathryn Ellis has been the court-appointed trustee since January. She says contacting Pettit's home heating oil customers who are owed money is complex. But we asked why she couldn't do what a competing oil company, Star Ice and Fuel, did and simply use Pettit's customer mailing list to at least inform former Pettit customers by letter or card. But Ellis rejected that idea as "not appropriate" and says there's a very clear process bankruptcy courts must follow.
"It's not my job to be publishing my name and phone," said Ellis. "The best thing for people to do is to file a Proof of Claim."
A "Proof of Claim" form may be a tall order for customers who don't know they have that option.
So we said to Ellis: "But they don't know what to do."
"I'm trying to compile a list of all the customers that had a credit balance with Pettit Oil and put them on the mailing matrix. Thank you." Ellis and her attorney walked out the door of the US Bankruptcy Court in Tacoma after a hearing on Pettit's assets.
If you believe you are owed money from Pettit Oil, you can print out the "Proof of Claim" form. The "Name of Debtor" is Pettit Oil. The case number is 13-47285.
Fill it out as best as you can and mail it to:
Clerk of Court
U.S. Bankruptcy Court
1717 Pacific Avenue, Suite 2100
Tacoma, WA 98402-3233
The general phone number for the U.S. Bankruptcy Court in Tacoma is (253) 882-3900.
U.S. Bankruptcy Trustee Kathryn Ellis can be reached at 206-682-5002. Email: firstname.lastname@example.org. Fax (206) 624-2631. Ellis' attorney is Deborah Crabbe: email@example.com
While not universally advised, you can also write a letter to Senior Judge Honorable Paul B. Snyder who is overseeing the Pettit case. It will become part of the public record.
Pam Bilodeau remains convinced no one cares about the little guy, or her 900 bucks. She's playing a song on her guitar in her Kitsap Peninsula home. She says she may now have a new title for the song. "Ha. 'You Burned Me.' There you go."