Relief sought for N.H. customers who prepaid for home heating oil‏

Nick Rees Jan. 4, 2010, 11:19am

CONCORD, N.H. (Legal Newsline) - Attorney General Michael Delaney has filed a petition for injunctive relief and petition for ex parte attachment against an Exeter-based home heating oil company.

Flynn's Oil Company is alleged to have entered into prebuy contracts with consumers for the purchase and delivery of home heating oil. Prebuy contracts require consumers to pay upfront for the oil they expect to need throughout the winter heating season. This allows the customer, in theory, to secure the best price while remaining immune to price hikes that happen during the winter.

Flynn customers, however, have alleged that they are either not receiving the correct amounts of oil that they prepaid for or have run out of oil.

The state also alleges that Flynn failed to comply with a state law requiring oil companies that require prepayment to include in their contracts, ""a clear explanation of the means by which the dealer will meet the obligations of the contract for the entire contract period, including supplier agreements, futures contracts, bonding, or a line of credit."

"My office is committed to protecting New Hampshire consumers against any business which attempts to take advantage of them, by obtaining prepayment for goods or services not delivered," Delaney said.

Under the court's granting of the state's petition for ex parte attachment, the state is allowed to attach real estate of Michael P. Flynn, Flynn's Oil Company LLC, and 94 Portsmouth Avenue Trust up to a total of $2 million.

One hundred of Flynn's customers' will see their prebuy pricing honored by Simply Green Biofuels, which will begin deliveries to Flynn customers with lock-in pricing starting the week of Jan. 4.

A similar situation occurred in 2008 in Connecticut when F&S Oil abruptly shut down operations, leaving 2,500 customers without oil. Connecticut Attorney General Richard Blumenthal arranged a settlement with that company that would give $1 million to customers affected, which amounted to only a 30 percent repayment.

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