HRK's assets almost all in Piney Point land, documents show

jsalman@bradenton.comJuly 27, 2012 

PALMETTO -- HRK Holdings LLC may have secured its first land sale at Piney Point, but the troubled firm still faces a monumental task of meeting creditors' demands.

A federal judge has approved HRK's sale of about 30 acres of Piney Point to Pennsylvania-based Air Products and Chemicals Inc. for $5.8 million. That deal is expected to close Aug. 31.

Now there's about $20 million more to raise, and HRK has very few assets other than land to help mitigate its liabilities, according to the company's financial disclosures filed with the court this week.

More than 60 creditors are owed $26 million from

HRK and will meet Monday in Tampa to discuss the case, including how the proceeds from the Air Products sale will be split.

HRK already has proposed keeping some of those profits for continued operations.

A financial disclosure shows HRK holds nearly $33.4 million in assets, all but $366,529 of which is appraised land at Piney Point.

The company has earned just more than $1 million in operating income so far this year, with $80,122.37 sitting in active bank accounts.

The company's top officers, Chief Executive Officer Jordan Levy and Chief Financial Officer Lionel Singh, earn a combined $355,000 a year. The duo has withdrawn $40,707 from the HRK's bank during the past 12 months for expenses.

"The only asset HRK has is land," said Jim Mikes, whose company is owed $250,000 by HRK. "They have been at this for six years and only have one sale and a few leases. Who are they going to sell all of this land to and how long will it take?"

The 675-acre Piney Point site is a former phosphate facility purchased by HRK in 2006 to store disposal from Port Manatee's Berth 12 dredging project. The tanks and liners housing the dredge failed in May 2011 -- spilling 170 million gallons of toxic water into Bishop Harbor.

A series of Bradenton Herald reports revealed the disaster could have been averted had the Florida Department of Environmental Protection laid a commonly used protective dirt cover on the gypsum stacks or stopped the project when a tear in the liner was discovered months before the dredging began.

An estimated $15.8 million worth of environmental clean up still remains at Piney Point. The only way HRK will survive its bankruptcy to satisfy those obligations will be to sell its way out, said Scott Stichter, an attorney representing HRK.

At current rain levels, Piney Point's reservoirs now will overflow by early September -- gushing more highly acidic storm water that's potentially deadly for fish and plant life into surrounding waters, according to records obtained by the Herald.

The state also will come calling for $15.8 million for HRK's long-term maintenance obligation at Piney Point in May 2013, a bill taxpayers ultimately will have to subsidize if HRK cannot survive the bankruptcy.

Levy declined to discuss the company's financial details any further Thursday.

"It's unfortunate for all involved that the site closure did not live up to the expectations or representations made to HRK or our dredging partners, but we're collectively addressing these issues as quickly as possible," Levy said previously in a statement. "HRK is committed to the property and safeguarding our Manatee County neighbors through prudent water management. We're eager to complete the bankruptcy process so that we may be able to further develop the property."

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.

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