Allied Technology Group, operator of a high-tech waste treatment complex in Richland, is in a financial squeeze it fears may force it into bankruptcy.
The company notified the Securities and Exchange Commission of that possibility in a Feb. 12 filing.
"Since we do not currently have sufficient funds to repay all of our indebtedness under our credit facilities, we may not be able to continue as a going concern if our lenders elect to accelerate payment," the company told the SEC. "In that case, we would likely become insolvent and subject to voluntary or involuntary bankruptcy proceedings."
ATG has Hanford contractual connections that it is apparently trying to use to help fight its way back into the black.
Federal and court documents show ATG:
-- Did not make a $5.75 million payment due June 30, 2000, on a $45 million bank loan made in 1999.
-- Did not make four monthly interest payments totaling $1.022 million between Oct. 31, 2000, and Jan. 31, 2001, on the missed $5.75 million loan payment. The money had not been paid as of Feb. 12 -- the latest date for which information is available.
-- Did not repay a $1.5 million short-term loan from an unnamed individual made Aug. 11, 2000, with a due date of Oct. 5, 2000. The loan repayment was extended to Dec. 15, 2000, but was not extended beyond that, and remained unpaid on Feb. 12.
-- Did not pay Richland-based Hiline Engineering and Fabrication Inc. $92,119 in 2000 for installing a control panel and software at ATG's Richland plant. Hiline filed suit in Benton County Superior Court on Jan. 12, 2001. ATG never replied to the filing, and Hiline won $97,640 in damages and legal costs by default on March 8. Hiline declined to comment.
-- Is a co-defendant in two California lawsuits -- one alleging a wrongful death and one alleging three wrongful injuries. The suit was filed after a U.S. Army artillery shell exploded at a scrap dealer in 1997, killing one person and injuring three.
ATG had a contract with the U.S. Army to remove spent shells and other scrap metal from Fort Irwin in California. The allegation is that an ATG subcontractor incorrectly declared some shells safe before they were sold to the scrap dealer. The wrongful death suit seeks $8 million in damages. The amount sought in the other suit was not listed in SEC documents. The Army has ended ATG's contract.
ATG officials declined to comment on the company's finances.
The company -- founded in the 1980s by Doreen and Frank Chiu of San Francisco -- employs 350 people at its Fremont, Calif., headquarters and at operations in Richland, Oak Ridge, Tenn., and Aiken and Columbia, S.C.
Commercial companies and some federal Department of Defense and Department of Energy operations hire ATG to take hazardous waste and low-level radioactive wastes to compact, to glassify or to incinerate. The processed wastes are returned to their owners. At least 90 percent of the nation's more than 100 nuclear power plants used some form of ATG's services as of Dec. 31, 1999, according to its SEC filing.
A major Hanford-related project apparently contributed to ATG's financial problems.
In 1995, ATG signed a 15-year contract with Westinghouse Hanford Co. to build and operate a facility to convert much of Hanford's mixed low-level radioactive wastes into benign glass blocks for storage at central Hanford. Mixed wastes are combinations of hazardous chemical wastes and low-level radioactive wastes. Fluor Hanford inherited that contract when it replaced Westinghouse in 1996.
DOE wastes are supposed to make up 25 to 50 percent of the new facility's work -- with commercial companies providing the rest.
The contract gives ATG five years to build the glassification facility, five years to glassify wastes, and five one-year extensions if Hanford is satisfied with its work. The glassification work could pay ATG almost $24 million if it obtains five years of extensions, said Fluor spokesman Craig Kuhlman.
Under the contract, ATG provided upfront money for the $30 million facility. It is supposed to get paid only for the glass blocks produced -- meaning ATG doesn't get any pay until the plant is running.
The glassification plant is built but is in final testing to get approval from state and federal regulators. That testing was supposed to be done late last year.
Fluor and ATG are renegotiating the 10- to 15-year contract, aiming to improve ATG's cash flow, Kuhlman said. He declined to elaborate.
ATG contends that new and stricter construction regulations kicked in since 1995, which increased construction costs, Kuhlman said. Consequently, ATG filed a claim with Fluor for an extra $5.4 million.
Fluor has twice rejected that claim but has agreed to consider it for a third time, Kuhlman said.
Meanwhile, Hanford officials plan to piggyback one of the site's high-profile headaches onto the Fluor-ATG contract.
That headache consists of about 1,500 barrels of uranium oxide powders and uranium chips stored in oil to prevent spontaneous combustion -- some unearthed and most buried -- at a site next to the 300 Area's northern edge about three miles north of Richland.
Last summer's 300-square-mile Hanford range fire came within a few hundred yards of the site -- the closest flames came to exposed radioactive materials.
Hanford officials want ATG to glassify the oil-soaked chips, starting in mid-2002, to change them into a safer form to store at central Hanford.