Addison Township officials discovered the Windsor, Canada-based company Energex Petroleum Inc., which owns the Lanphar 1-12 wells located near Leonard and Dequindre roads, currently owes more than $20,200 in unpaid personal property taxes dating back to 2008.
All annual personal property taxes from 2008 to 2016 are considered “delinquent,” according to a recent statement issued by Oakland County Treasurer Andrew Meisner.
Nearly $8,300 of the total owed by Energex represents interest and fees.
According to township Supervisor Bruce Pearson, a notice of this outstanding balance was mailed to the company on Jan. 31. It was written by township attorney Bob Davis.
If Energex officials do not pay the taxes owed in full within 21 days, Pearson said the township is authorized to seize and auction off any assets located on the property to cover its unpaid balance.
“By law, we’re supposed to auction off their personal property to pay the tax – just enough of the equipment to pay the tax,” he explained. “We’ve officially notified them and we’re waiting to hear a response. If they don’t pay the tax, then technically, we can go and have an auction and (sell) off whatever assets they have there, enough to pay the tax.”
According to Pearson, those assets could include scrap metal, motors, electronic equipment and generators.
According to Michigan law, “If a person neglects or refuses to pay a tax on property assessed to that person, the township or city treasurer, as appropriate shall . . . collect the tax by seizing the personal property of that person, in an amount sufficient to pay the tax, the fees, and the charges for subsequent sale of the property, and no property is exempt.”
Davis’ letter to Energex states the assessments are deemed final and not appealable, as Energex failed to challenge them with the Board of Review and to file an appeal by its deadline of “May 31 of the tax year involved.”
Pearson said the township fully intends on exercising this right by seizing and auctioning off Energex’s assets if the company’s back taxes are not paid by the deadline.
“(Energex) hasn’t fulfilled the responsibilities that (it) should have fulfilled,” he said.
According to township Treasurer Lori Fisher, although the township performs its own assessing, delinquent taxes are handled, not by the township, but by the Oakland County Treasurer’s Office.
“We are aware of (Energex’s unpaid balance) and we’re ready to take action against Energex to recover the funds,” Fisher said. “Typically, Oakland County recovers delinquent taxes every year . . . On March 1 of every year, the delinquent taxes get turned over to the county and our system clears out. We don’t see what was collected for previous years. We only see (unpaid balances for) the current year.”
Fred Miller, a representative from the Oakland County Treasurer’s Office, said county officials have been working with both Addison and Energex officials for a number of years in an effort to settle Energex’s debt.
The county’s most recent correspondence with Addison Township officials was just one more attempt on its part to collect the company’s “relatively large” debt, according to Miller.
A statement, which disclosed the total amount owed by Energex, was forwarded to Addison officials at that time.
“We have a staff of four individuals who cover (delinquent taxes within) the entire county. With personal property taxes… our collectors go out and talk to folks who have delinquent (taxes) and we try to work out payment plans. This one, based on the notes, it looks like they’ve gone around and around with (Energex’s) attorneys. . . There has been close coordination with Addison Township over several years. I’m sure that they’re (as) frustrated about this as we are . . . This is definitely something that we’ve been trying to resolve . . . At this point, we don’t have (many) tools at our disposal to collect this money,” said Miller.
Miller added that it “appeared as though” Energex Petroleum Inc. filed bankruptcy, which “could further complicate things” in the collection process.
In an interview with this reporter, Energex President Peter Bilodeau clarified that while the Canadian operations of Energex filed bankruptcy approximately one year ago, Energex USA, the entity which owns the Lanphar 1-12 wells, is still “solvent.”
Bilodeau said the wells located at Lanphar 1-12 in Addison were acquired by Energex in 2013.
He stated any of the taxes owed prior to that 2013 acquisition were accumulated by the well’s former owner, the London, Ontario-based company Onco Petroleum, which has no involvement with Energex.
The taxes owed to the township since 2013 were accumulated by Energex and are also considered “delinquent.”
Shortly after the wells were acquired by Energex, according to Bilodeau, the price-per-barrel for petroleum dropped significantly, which reduced the amount of revenue the company has been able to reap from its wells.
Bilodeau confirmed Energex has received the township’s letter and said steps are being taken to correct the situation.
“We are making arrangements to get those taxes taken care of over time,” Bilodeau said. “We have invested a substantial amount into Michigan trying to get Energex going by hiring Michigan people to do the work – far more than we’ll ever get back from those wells. It’s not like we’re reaping rewards and pulling them out of the country . . . We’ve put a lot of money into the venture and it hasn’t paid dividends to us yet. We hope to do that in the months ahead . . . Economics haven’t worked out very well, which is why there are some bills that still have to be cleaned up but, at the end of the day, with oil prices returning to moderate levels. . . we will be reactivating the wells in the next few months and we will do what we can to make things right.”