County settles with Ryckman Creek over taxes owed

Bradie Jill Jones, Herald Reporter
Posted 9/15/17

Litigation comes to end over taxes owed by Ryckman Creek

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County settles with Ryckman Creek over taxes owed

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EVANSTON — After an arduous litigation process, the Uinta County Board of Equalization and the privately-owned Ryckman Creek natural gas processing facility have finally agreed upon a settlement concerning the gas company’s disputed, unpaid taxes for the years 2015-16.

The litigation followed Ryckman Creek’s bankruptcy from early last year.

Uinta County Attorney Loretta Howieson addressed the county commissioners Tuesday, Sept. 5.

“Ryckman Creek owes a substantial amount of money to various agencies and banks,” Howieson said, “in excess of $20 million dollars.” 

A decent portion of that debt is owed to Uinta County. Because of this, the county has sunk time and money into pursuing the unpaid debts owed by Ryckman Creek.

Much of the time investment was on Howieson’s part. She spent upwards of 380 hours working on the case. Additional litigation costs included $33,000 paid to Jeffrey R. Waxman, a bankruptcy attorney who is licensed to practice law in the state of Delaware, where the bankruptcy proceedings occurred. 

Ryckman Creek specializes in natural gas storage and is located north of Evanston. The company’s time of financial difficulty began in 2013, after an explosion occurred on their property, causing damage to the facility and equipment. 

Uinta County Treasurer Terry Brimhall brought it to the county’s attention early on that Ryckman Creek had not paid its 2015 taxes, so when the company declared bankruptcy on Feb. 2, 2016, it came as no surprise to the Uinta County Board of Equalization. 

In the bankruptcy court proceedings, it was determined by Wyoming State Law that the deadline for Ryckman Creek to appeal the 2015 taxes had been missed and that the taxes were owed before Ryckman filed for bankruptcy in 2016. 

Thus, the plant is required to pay the full amount owed for 2015, which Howieson said, “is approximately $1.28 million dollars that the county will receive.”

Whether this amount will be paid in one lump sum or in up to five installments over five years is still undecided. 

“... What percentages and in what time frame the interest that is accruing on 2015 is still being determined — but that is truly the only issue that is currently pending as far as active litigation for 2015 within the bankruptcy court,” Howieson said. 

Next, the discussion turned to the unpaid 2016 taxes. There was some dispute as to whether the 2016 taxes would be considered as pre-filing or post-filing debt.

According to state law, the taxes were owed on Jan. 1, 2016.  Ryckman Creek did not file bankruptcy until Feb. 2, 2016, so the tax statements had been delivered before the bankruptcy was declared. 

Delaware Judge Kevin J. Carey agreed to respect the boundaries of jurisdiction, leaving the 2016 appeal by Ryckman Creek to be handled by the Uinta County Board of Equalization. This decision saved the county substantial legal fees. 

In June of 2017, the county commissioners discussed the owed amount and determined that a settlement would be the best course of action. 

They did so to “... ensure money to not only the county but [also] our other mill-levy holders,” Howieson said. “So a settlement was reached and compromised for the taxes that had been levied in an amount of $600,000.”

The original amount owed by Ryckman Creek for 2016 was more than $1.5 million. By settling for $600,000, the county took a loss of nearly $1 million.

Following the settlement for $600,000, there was an immediate payment of $250,000 by Ryckman Creek. When the remaining $350,000 will be paid is still being determined but regardless, at a rate of 18 percent, the debt will begin accruing interest on Nov. 1. 

Going forward through the bankruptcy, Ryckman Creek’s future taxes will be labeled as administrative expenses. For as long as Ryckman Creek remains in bankruptcy court, the taxes are due when they are due: Nov. 10 and May 10 — as scheduled for every taxpayer — or by Dec. 31 at the end of the year.

Ryckman Creek again took issue with the appraised value determining its 2017 taxes owed. The company appealed to Uinta County Assessor Lori Perkins in a timely manner. Through negotiations, a settlement was reached. 

The original assessed value was $158 million, but the settlement brought the value down to $90 million. 

“It’s kind of like buying a car,” Perkins said, “you make an offer, they decline, they make an offer, you decline. They wanted to settle for a lot less than $90 million. They wanted to settle for $83 million and we would not do that.” 

Ryckman claimed that the assessed value had dropped because of some “problems with the plant.” 

Perkins defended her decision to the county commissioners, saying, “They would have appealed to the county board of equalization and then they would have appealed to the Wyoming State Department of Equalization … and then they could have appealed it to a District Court and then they could have gone all the way to the Supreme Court.” 

Those potential litigation proceedings would have cost Uinta County a considerable amount of money. 

Perkins said that the assessor’s office, in conjunction with privately contracted assessing firm TY Pickett, “... will be assessing for 2018 and I can’t tell you what will happen — whether they (Ryckman Creek) will appeal those and try to throw those into a bankruptcy, I don’t know. But to try and stay out of the litigation process with the bankruptcy court, possibly getting a lot less than what we did, we settled.” 

The Uinta County Commissioners ended the Sept. 5 meeting by passing and signing a notice of uncollectable taxes as well as approving the settlement reached between the assessor’s office and Ryckman Creek.