PORT ANGELES — The Port of Port Angeles filed suit this week in Clallam County Superior Court against defunct Peninsula Plywood LLC for more than $1.6 million in unpaid rental payments, equipment rental fees and funds owed under a log transport licensing agreement.
PenPly owes a total of more than $2.4 million to the port, city of Port Angeles and state Department of Labor and Industries.
Only the port has filed legal action against the company.
According to the lawsuit, here’s the total amount the company allegedly owes under agreements it signed beginning July 31, 2009, with the port: $1,572,933.36 for breach of PenPly’s lease, $70,478.49 for breaching a license agreement, $8,046.26 for breaching an equipment rental agreement — a total of $1,651,458.11.
The mill, which was open 20 months until it ran out of money and shut down in November, owes the balance of a 10-year lease, port Executive Director Jeff Robb said Tuesday.
Odds are the port will not collect the total amount owed, Robb said.
“It’s probably not likely,” he said. “But there’s a contract for 10 years.”
No cash left
PenPly co-investor and part-owner Grant Munro said Tuesday that while the company, which had employed up to 159 people, has not declared bankruptcy, there’s no cash left.
“There is a bank account with no money in it,” he said, adding that he and the company’s other investors had, through loans and equity, put “probably at least in the $3 million range” into the company.
“The banks are taking possession of the assets,” he said.
“They will sell those assets, and I’m sure the port is looking at all those assets and making sure there is nothing they can go after.”
Robb said Munro had informed him that PenPly had nothing of value.
“It’s our fiduciary responsibility to either validate or disprove that there are no assets,” Robb said.
Not liable
Munro said the company’s owners are not personally liable for what is owed the port — or any other public entity to which PenPly owes money.
“We don’t expect to be liable,” he said.
The company was set up as a corporate entity under which investors are sheltered from certain kinds of losses, though not all losses, Munro said.
“That’s why investors are willing to invest in companies,” he said.
Utility bills
PenPly still owes the city of Port Angeles $297,432 for unpaid utility bills after a deposit was applied to the unpaid amount, city Attorney Bill Bloor said Monday.
The city is still mulling its options on collecting the utility payments, Bloor said.
“We’re still considering it and are probably getting closer to determining what the City Council is going to do or not do,” Bloor said.
Money owed state
PenPly also still owes $523,170 to the state Department of Labor and Industries for workers’ compensation premiums, agency spokeswoman Elaine Fischer said Tuesday.
“We will continue to try and collect that and have issued liens,” she said.
“We’ll wait like the other creditors to see if any of the money can be recovered through the company’s sale of assets.”
Munro’s company, Munro LLC, has an ongoing lease that was signed “some time back” to rent PenPly’s log yard and has hired a contractor to operate a debarker, which is free and clear of liens, Munro said.
“We are running that, and we are back in business,” he said.
The lease has 13 months to go, Munro said, adding that the logs are being shipped to China.
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Senior Staff Writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.