Friday, April 24, 2015

Bion Makes The Link Between Passing SB 724 And Repaying Its PennVEST Loan

If it wasn’t clear before it is now.  Bion Environmental Technologies, the company who wrote and is heavily promoting Senate Bill 724 (Vogel-R-Beaver) as a solution to reducing pollution to meet Pennsylvania’s commitments to the Chesapeake Bay cleanup, is really pushing the bill to help it pay back its PennVEST loans.
The link between passage of Senate Bill 724 and repayment of the 2010 $7.7 million PennVEST loan by Bion was made clear in an email exchange between PennVEST and a representative of Bion in February of this year.
Still pressing PennVEST to avoid a formal declaration of default on the PennVEST loan, Bion was pushing for a modification of its loan agreement to stretch out the repayment schedule to allow time for the bill to pass.
The Bion representative said in a February 17, 2015 email, “Our client has been willing to enter into a (loan) modification since 2013 to allow it time to pass legislation and find a way to repay you. Our client has also offered to continue (to) push legislation and to maintain the asset.”
Paul Marchetti, Executive Director of PennVEST, said in an email of the same date, “I do have a responsibility to do whatever I think is necessary and reasonable to effect repayment of our loans.  While legislation may offer one way to accomplish that, I have to look to Bion for repayment.  In that context, I feel that it is my responsibility to take any action that could encourage repayment on their part, and this is simply one such action (placing Bion on the state’s debarment list).”
The debarment list Marchetti was referring to is a list the state maintains of companies that fail to pay the state money they owe.  Listing Bion would limit the ability of the company to enter into contracts with the Commonwealth, and coincidentally responding to the RFP process under Senate Bill 724.  
The potential of the debarment list action was included in the PennVEST letter to Bion on September 25, 2014 as one step PennVEST could take to bring pressure on the company to repay the loan.
Interestingly, there is nothing in Senate Bill 724 that would prohibit Bion from paying back its 2010 $7.7 million PennVEST loan with new money it received for winning an RFP under the bill administered by PennVEST.  So Bion could be in the position of paying PennVEST back with PennVEST’s own money.
PennVEST is sticking to its guns and wants the taxpayer’s money back.
A copy of the email exchange is available online.
There will be more on this issue….
Related Stories:
Analysis: SB 724 So Important To Bion’s Survival It Notified The SEC

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