Concord Power and Steam, which proposed flopped steam plant, files Chapter 7 bankruptcy
Concord Power and Steam – the company that was supposed to build a new steam plant in the South End and heat Main Street sidewalks – has filed for bankruptcy.
That move stays two lawsuits filed against Concord Power and Steam, alleging the company still owes more than $580,000 combined to two creditors for their work on the failed plant. But Peter Bloomfield of Concord Power and Steam claims that money wasn’t due unless the plant actually went forward, and there’s no debt since plans for the plant died last year.
“I would have just let (Concord Power and Steam) die a graceful death, except these two entities are trying to collect on it despite the fact that the project didn’t go forward,” Bloomfield said yesterday. “So rather than spend thousands of dollars in court to defend something that we have no money to pay them with anyway, the most simple thing was to (file bankruptcy).”
That decision has no bearing on Concord Steam Corp., a separate company, of which Bloomfield is also president. Concord Steam operates the existing steam plant on Pleasant Street, which heats about 200 buildings in the area.
The bankruptcy filings also have no effect on the proposed heated sidewalks downtown, because the city has been considering powering its own underground system independent of Concord Power and Steam since the South End plant fell through in December.
“There’s no effect whatsoever for Concord Steam,” Bloomfield said of the bankruptcy for Concord Power and Steam.
Concord Steam has been operating since 1938. In 2008, Bloomfield created Concord Power and Steam, which would have owned the South End plant. But he and Concord Steam Vice President Mark Saltsman struggled to find customers who would buy the electrical power their new wood-burning plant would produce. They also struggled to find financing for the project, even though they began working with developers Steve Duprey and Jon Chorlian to that end last year.
The team announced in December that the plant wouldn’t go forward.
On April 5, Methuen Construction of Salem sued Concord Power and Steam for breach of contract, claiming it is owed more than $515,000 for work completed on plans for the steam plant. Another breach of contract lawsuit, this one filed by Wagner Business Development and Consulting out of Portsmouth, is also pending against Concord Power and Steam.
Joe Barbone, president of Methuen Construction, said he worked with Bloomfield for six years to develop the new steam plant. In his lawsuit, he alleges Bloomfield and Concord Steam are liable for the money he is owed from Concord Power and Steam.
“It was not until (Concord Power and Steam) failed to live up to the terms of the agreement with (Methuen Construction) despite receiving several time reprieves, did (Methuen Construction) find itself forced to find the pending lawsuit,” he said in a written statement.
On April 14, Concord Power and Steam filed a petition for Chapter 7 bankruptcy. That filing claims the company owes nearly $5 million to various creditors but doesn’t have a cent in its own assets.
That debt includes about $3.2 million owed to P&M Realty of Concord, which is also owned by Bloomfield. None of the other creditors had filed a lawsuit against Concord Power and Steam.
Now that Concord Power and Steam’s proposed new plant has fallen through, Bloomfield said his other company is planning an upgrade to its existing plant on Pleasant Street instead.
“We’re still in the preliminary engineering phases of it,” he said.
In the bankruptcy case, a meeting of creditors is scheduled for May 22.
(Megan Doyle can be reached at 369-3321 or email@example.com or on Twitter @megan_e_doyle.)