Former Gainesville Biomass Plant Supplier Files for Bankruptcy

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Bill Gaston, owner of the Wood Resource Center, gives a tour of his wood waste recycling plant, Griffis Lumber and Sawmill, 9333 NW 13th Street. (Ryan Summers/WUFT News)

Wood Resource Recovery, a family-owned waste recycling company based in Gainesville, filed for bankruptcy last week.

The company filed its bankruptcy petition in federal court on Thursday, attributing recent revenue losses to an ongoing lawsuit with the Gainesville Renewable Energy Center (GREC) over GREC’s decision to no longer purchase the company’s biomass materials. Wood Resource Recovery’s owner, Bill Gaston, said the company needs to reorganize to compensate for financial losses.

The lawyer handling the reorganization, Jeff Childers of Childers Law in Gainesville, said Wood Resource Recovery’s business in cities around the state are doing fine.

“Fundamentally there is nothing wrong with the company,” Childers said. “It just needs to reorganize to adjust to the new circumstances with having 20 percent fewer revenues going from one day to the next.”

Wood Resource Recovery opened in 1986 under the supervision of Gaston, and in 2010 the company signed a long-term biomass supply deal with GREC.

It was the largest deal in the company’s history.

According to Wood Resource Recovery, the company was supposed to supply almost half of the biomass fuel needed for GREC’s 100-watt biomass plant that went operational in 2013 and supplies energy to Gainesville Regional Utilities.

Under the contract with GREC, Wood Resource Recovery controlled a 27-county service and was supposed to supply between 264,000 to 277,000 tons of biomass annually to fuel GREC’s plant.

The Wood Resource Recovery claims GREC breached the contract and stopped receiving any biomass from Gaston’s company. Last April, the company filed a civil lawsuit in state court against GREC.

Wood Resource Recovery’s lawyers say there’s a connection between the 2015 lawsuit and the bankruptcy filing.

“When the Gainesville biomass plant breached its contract with Wood Resource Recovery, it essentially cut out 20 percent of Wood Resource’s gross revenues, but Wood Resource’s expenses remain the same,” Childers said.

“The state court lawsuit is to recover the damages that the plant did to Wood Resources, and the reorganization is just further evidence of how they were damaged.”

Patrice Boyes, who represents Wood Resource Recovery in the lawsuit, agreed.

“The two cases are not technically linked or related,” Boyes said. “They are not in the same court. But certainly the reorganization that our client has filed is directly a result of the breach of the contract by GREC.”

Boyes said Wood Resources Recovery is pursuing damages in excess of $25 million in the state court lawsuit and has scaled back its operation after terminating its GREC contract.

“They scaled back,” Boyes said. “They had to reduce their workforce and shed equipment and shed overhead that wouldn’t be needed to service the GREC contract.”

According to the company’s lawyers, Wood Resource Recovery will continue pursuing the lawsuit against GREC as it reorganizes.

Carolyn Wasdin, operations administrator at Gainesville Renewable Energy Center, wouldn’t speak Monday about Wood Resource Recovery’s bankruptcy filing.

“We don’t have a comment on their bankruptcy situation,” Wasdin said. “And we can’t comment on pending litigation.”

There are no other current court cases involving the Gainesville Renewable Energy Center.

A court date for the trial between the Wood Resource Recovery and the Gainesville Renewable Energy Center is set for May 2.

About Ryan Summers

Ryan is a reporter for WUFT News who may be contacted by calling 352-392-6397 or emailing news @wuft.org

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