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Coal Company Ordered to Pay $9.1 Million in Overdue Fees for Renting the Grant Town Power Plant



February 26, 2024 - The long running saga of a corporate landlord chasing its overdue tenant for rent money came to a conclusion Friday with a final order from West Virginia Business Court Judge Michael Lorenson.

American Bituminous Power Partners must pay roughly $9 million dollars in back rent to Horizon Ventures. Ambit also owes Horizon interest on the back rent it is required to pay Horizon for renting the Grant Town Power Plant.

The case originated as a dispute over back rent between Ambit and Horizon. Horizon owns the Grant Town Power Planet which Ambit operates. A bench trial in October 2023 untangled the labyrinthian lease and contract agreements between the two companies which Ambit used to delay paying rent.

Lorenson handed a ruling down in West Virginia Business Court on Halloween last year, which found Ambit had breached its lease agreement with Horizon by not paying rent since 2013. That ruling ordered Ambit to turn over documentation immediately to begin calculating how much rent it owes Horizon.

However, 14 days after Ambit turned over documentation it claimed was confidential, it did not appear to include an annual report that was also required by the ruling. The company also did not begin paying rent immediately as ordered to do so. A trial to determine damages was held Dec. 15, 2023.

"Nice win for Horizon," Mark Kepple, attorney for Horizon, said in a text message. "This is recognition that Ambit was simply wrong when it failed to pay its rent all the while collecting revenue from the sale of electricity. Very pleased."

Horizon was also represented by Joseph Nogay, with President Stanley Sears appearing for the company.

Roberta Green, counsel for Ambit, declined to provide comment. Corporate representative Christophe Collet sat in for Ambit.

According to the ruling filed by Judge Lorenson, Ambit was on the hook for three rent periods. Period 1 ran from February 2013 through Sept. 30, 2013. Period 2 ran from Oct. 1, 2013 through Nov. 4, 2020. Period through ran from Nov. 5 through the present day. The court heard testimony from Sears describing how rent was calculated, which Sears verified with two accounting firms.

Ambit attempted to argue on technicalities.

"The court considers that AMBIT failed to offer any position in response to Mr. Sears's aforementioned testimony," the ruling reads, "other than to assert that the previously subordinated rent payments remain under the category of subordinated, despite the elimination of senior debt, they do not become unsubordinated. This court has rejected that position."

Essentially, Ambit argued it couldn't pay its rent because it owed money on another debt, citing financial shortfalls. However, Sears testified that specific calendar dates matter when looking at when the exception Ambit claimed applied, and that on the dates Ambit mentioned, the exception the company claimed didn't apply.

Due to the lack of evidence and witnesses presented by Ambit, the court disagreed on various other positions the company took.

Horizon also sought damages for annoyance and inconvenience caused by Ambit's failure to pay rent. However, under West Virginia law, corporate entities may not recover damages for emotional distress or outrage.

Lorensen denied Ambit's request for a stay on the order, and required the company to deposit the money with the Circuit Clerk of Marion County to be held in trust within 50 days. Lorenson issued a final order in the matter, closing the case once and for all.