FLINT TWP. — Despite assurances of uninterrupted garbage collection while Richfield Management LLC and affiliates are under Chapter 11 bankruptcy protection, one trustee wants a legal opinion.
At the Oct. 15 board meeting, board trustee Frank Kasle referenced information provided to the board about the bankruptcy and asked Township Supervisor Karyn Miller to consult with township’s attorneys.
Kasle said he understood that Richfield filing for bankruptcy might not necessarily affect operations right away, but he did not see it as a good thing.
“Bad things can happen when companies are in Chapter 11,’’ he said.
Miller said that she had been in contact with Dan Garman, the township’s
Richfield representative, who had assured her that garbage services would continue without interruption during bankruptcy proceedings.
But Kasle said he wanted to be sure the township’s interests are protected.
“I would ask that you and the clerk make sure we are not jeopardized by this,” Kasle said. “Dan Garman’s assurances don’t mean much to me. He assured us his company was solid when we entered into this contract.”
Kasle said he had voted against Richfield, the low bidder, when the township board approved the contract in 2010.
Its contract with Flint Township began Jan. 3, 2011 and earlier this year received high praise about bringing improvements including lower fees to township residents, the first ever recycling and rewards program, weekly yard waste collection and dumping privileges.
Kasle asked if Richfield is paid in advance.
“It isn’t too hard for a Chapter 11 to turn into a Chapter 7 then all of a sudden we have paid a big chunk of money and they are not providing services,’’ Kasle said.
“I think we ought to be careful in that regard and not take advice from a company that filed bankruptcy but from our professional advisors.”
Miller reminded him that the township holds a $100,000 deposit from Richfield as assurance and will use that money to continue services as quickly as possible if Richfield defaults.
But she also agreed to seek an opinion from the township’s attorney.
Clerk Kim Courts added that she already had been contacted by other waste collection services interested in becoming the township’s provider.
Kasle also said he would be interested in learning what other affected municipalities are doing.
Richfield or its subsidiaries handle garbage collection services for about 54 communities in Michigan and approximately 10 in Genesee County including the townships of Davison, Richfield, Grand Blanc, Atlas, Genesee, Argentine and Mundy and the cities of Flushing and Clio, according to its web site.
Richfield voluntarily filed for Chapter 11 on September 18. In a letter to customers dated that day, company secretary C. Thomas Toppin stressed that this step was being taken to ensure continued quality service.
“Many factors have combined to affect Richfield’s ability to obtain bank financing and to operate,’’ the letter stated. “ After examining the alternatives open to us, we have decided to reorganize the Company under the protection offered by Chapter 11 of the United States Bankruptcy Code.”
The letter further stated that Richfield has received a bank commitment for post-petition financing that would allow it to provide continuity of services to its customers.
“We expect to maintain normal business operations throughout this process,’’ the letter stated.
More information about Richfield’s reorganization process is provided on its web site at www.kccllc.net/Richfield or by calling its restructuring hotline at 866-967- 0498.