Rhoads Energy will buy four divisions of defunct Worley & Obetz under an agreement approved Tuesday in U.S. Bankruptcy Court.

And it might end up acquiring a fifth.

Settlement is scheduled for Sept. 25, when Lancaster-based Rhoads will become the owner of these idle Worley & Obetz divisions:

Its propane business, serving residential, farm and small business customers.

Its HVAC installation and maintenance business, serving residential and small commercial customers.

Its Amerigreen residential and commercial natural-gas business.

Its Amerigreen wholesale propane business.

The number of former customers of each business was not immediately available, though executives involved in the transaction said the residential propane business was Worley & Obetz’s largest.

Former Worley & Obetz customers who sign up with Rhoads can expect service to resume next week, following settlement, a Rhoads executive said Tuesday.

Rhoads will honor the contracts that Worley & Obetz had with its propane and HVAC customers.

Rhoads will become the owner of these pieces of Worley & Obetz in a three-step process.

The sequence began Monday when a Massachusetts-based firm named Diesel Direct won a bankruptcy-court auction for nearly all of the Worley & Obetz assets, including the four divisions. Diesel Direct agreed to pay $10.7 million, court filings show.

Diesel Direct will complete that purchase at that Sept. 25 settlement. Then Diesel Direct will sell the four divisions to Rhoads for an undisclosed price.

The two companies encouraged former Worley & Obetz employees to contact them about job opportunities.

Biggest of its kind

Diesel Direct is the nation’s largest mobile, onsite refueler of commercial fleets, doing business in 46 states, including Pennsylvania.

A company executive declined to disclose its number of employees or its annual revenue.

The main attraction for Diesel Direct is Worley & Obetz’s fleet fueling business, said Diesel Direct’s Walter McNamara.

“We’re aggressively trying to grow our business,” said McNamara, the chief financial officer.

McNamara noted that the Manheim-based division would fit geographically with Diesel Direct branch locations in Harrisburg and Whitehall, Lehigh County.

“This is a natural extension of our existing business platform,” said McNamara.

Other pieces of Worley & Obetz are not such a good fit for Diesel Direct — most notably, its retail division, which sold and delivered heating oil to homes, and kerosene, gasoline and diesel to local farms and businesses.

“There are a number of parties who’ve expressed interest in it,” including Rhoads, said McNamara. “We’ll determine (its fate) in a very short timeframe.”

The retail division isn’t the only Worley & Obetz operation that doesn’t appear to mesh with Diesel Direct. Others include the Amerigreen electrical brokerage division and the Value Energy division, a home heating oil and propane company in Sayre, Bradford County.

Reassurance from Rhoads

Rhoads CEO Mike DeBerdine said anxious customers of the four idled Worley & Obetz divisions that Rhoads is acquiring can stop worrying about their energy needs.

DeBerdine said his message to those customers is:

“You’re going to have a solution.You’re going to have supply. All of those details have been worked on well in advance of this auction. We have a plan and we’re ready to go.”

He added, “We’re delighted that we were able to keep the businesses intact and avoid a lot of disruption in the local market.”

Rhoads has put a portal on its website, rhoadsenergy.com, for former Worley & Obetz customers to use if they wish to sign up with Rhoads.

At Monday’s auction, Diesel Direct topped two other bidders for the Worley & Obetz assets.

The two bidders that came up short include Wiggins Gas Propane & Alternative Fuels, which established a starting point for the auction with an $8.1 million offer in late August.

For its trouble, Wiggins — a newly formed company established in hopes of landing the Worley & Obetz assets, then reselling them — will get a breakup fee of $243,000.

Excluded from Monday’s auction was Worley & Obetz’s Ranck Plumbing Heating AC. Ranck was sold in late June to new owners for $1.6 million and has resumed operations.

Also excluded were Worley & Obetz’s seven Wo-Go/Pacific Pride fuel stations. They’re in Manheim, Ephrata, Lititz, Lancaster, Elizabethtown, Mount Joy and Harrisburg.

Worley & Obetz’s troubles burst into public view in May, when the firm said it would lay off 100 people because of financial troubles caused by fraud, which it blamed on former CEO Jeffrey B. Lyons.

When a reorganization plan failed to win the support of its lenders, Worley & Obetz abruptly closed on June 4, laying off the remainder of its 250 employees. It initiated bankruptcy liquidation proceedings June 6.

Last month, Lyons and the company’s former controller, Karen L. Connelly, were charged by Northern Lancaster County Regional Police with commiting a $1 million credit-card scam.

Lyons remains under federal investigation for what Fulton Bank, Worley & Obetz’s main lender, has called a “massive” bank fraud.

What to Read Next