Ball Ground Recycling LLC on Friday filed for Chapter 11 bankruptcy in the United States Bankruptcy Court’s Northern District of Georgia, according to documents obtained by the Cherokee Tribune.
The filing was completed by Jimmy Bobo, who lists himself as the managing member of Ball Ground Recycling.
The filing came just days before the county planned to force the owner off the property if he did not pay some of the money owed Cherokee County for bond payments.
Reserved for businesses, Chapter 11 is used to reorganize corporations.
D. Bobo, LLC and J. Bobo, LLC are listed as the equity security holders, both of which have 50 percent ownership in the company.
Herbert Broadfoot, attorney for the company, said on Tuesday he “was not really in a position” to discuss the filing. Bobo did not return calls or emails by press time.
In the documents, Bobo lists Ball Ground Recycling’s creditors as being between one and 49, and its assets and liabilities are each estimated to be somewhere between $10 million and $50 million.
Creditors are listed as: BNY Mellon Trust Company NA of Atlanta for $3,600 in trustee fees; Downs & Colquitt, PC of Marietta for $5,590 in accounting services; Flint Connolly & Walker, LLP of Canton for $540 in legal fees; Fraizer & Deeter, LLC of Atlanta for $20,000 in audit fees; Georgia Power for $4,581.46 in utility bills and the Cherokee County Resource Recovery Development Authority for $1.72 million in lease payments.
County Commission Chairman Buzz Ahrens said the county still hasn’t received the formal notice of the filing, but added County Attorney Angie Davis was able to find the documents over the weekend.
“Since these are sensitive legal matters, I can tell you that our attorney and bond counsel are looking into the implications and what action we can or cannot take,” he said.
County Commissioner Jim Hubbard said he didn’t expect the company to file for bankruptcy and said he was “anxiously” waiting for the county’s legal team to come back with the filing’s impact.
“The whole thing is sort of a shock,” he said, noting he has been trying to be optimistic throughout the ordeal. “This was not something I had been thinking about.”
County Commissioner Harry Johnston added the county knew the company was in “trouble.”
Johnston said the county did issue Bobo a 10-day notice to vacate the property, which required him to be off the property by the close of business on Tuesday.
Johnston noted the filing still “doesn’t get us off the hook” when it comes to making the payments as the county guaranteed the bonds.
He also said the county informed Bobo that he would need to make a “significant partial payment” of $60,000 to stop the eviction notice.
He noted it was “conceivable” Bobo could come up with the money to continue operating the site.
“That remains to be seen,” he added. ‘There’s a fair amount of uncertainty.”
The commission in February moved $1.8 million out of Special Purpose Local Option Sales Tax funds into the general fund to cover the payments on the debt after Bobo failed to make payments owed on the bonds the county had guaranteed.
The money from the general fund was originally used for expenses that were paid by SPLOST funds last year and the move would reimburse those payments back into the general fund, freeing the monies up to cover the bond debt payment.
The county was notified last year by the Bank of New York that Bobo had not made payments into the escrow account, and the county was obligated to make the payments.
The county had to make $1.2 million in payments last year and still has to pay an additional $608,171.28 this year.
A total of $1.2 million was originally due on a yearly basis, with the county placing $101,000 into an escrow account for the purpose of making semi-annual debt service payments.
The county created the Resource Recovery Development Authority in 2007 and approved the bond rate for a maximum of $18.1 million in bonds.
The bonds were used to relocate Bobo’s company from its former location on Blalock Road near Holly Springs to its current site on Highway 5 just south of Ball Ground.
The county guaranteed financing through the issuance of bonds through the authority.
The Blalock Road site was used for parks for the county.
The county government owns about 160 acres on Blalock Road in the Toonigh community, 30 of which was being used by the company, which recycles yard clippings into landscaping materials, topsoil and mulch.
Both Johnston and Hubbard said they are still holding out hope that the county will be able to bring in another operator to run the facility and make payments.
“There are other companies interested in moving into Cherokee County and I feel confident about us finding an operator,” Hubbard said.
Johnston noted the county still has two “decent” prospects they are considering, one of which has requested a formal appraisal on the assets at the plant.
On the flipside, Johnston added no one has stepped forward to indicate they would also take on the full debt load.
Johnston added the bankruptcy filing was at least in the back of the minds of some officials.
“We knew this was very possible,” he said, adding the filing was not a surprise. “It only makes it less likely that Bobo will pay us. We’ve come to realize that he’s not very likely to pay us anyway. That’s why we gave him notice to vacate.”