A contest that will alter competition between Oahu commercial trash haulers is expected at a U.S. Bankruptcy Court auction in Honolulu today.
The assets of Rolloffs Hawaii LLC are up for sale and could result in the biggest company in the market, Honolulu Disposal Service, acquiring its biggest rival and controlling an estimated 91 percent of business.
According to city data, Honolulu Disposal and a sister company were responsible for 56 percent of waste delivered by commercial firms to the city’s Waimanalo Gulch landfill and HPOWER facilities during the first half of last year.
Rolloffs was the second largest at 34 percent.
The competition was set off when Rolloffs, which had revenue of $29 million in 2015, filed Chapter 11 bankruptcy Dec. 9. The company reported having 83 employees, about 70 vehicles and contracts with customers that include housing complexes, Outrigger Hotels, Foodland Super Market, Wal-Mart and McDonald’s.
Rolloffs initially lined up a $5 million purchase offer from West Oahu Aggregates, which delivered 5 percent of commercial trash to the city’s two facilities and ranked as third biggest in the market.
Honolulu Disposal then committed to pay $5.2 million for Rolloffs. Higher bids can be made at the auction.
One other company, Maui-based Aloha Waste Systems Inc., has positioned itself to possibly bid by retaining an attorney to represent it in the bankruptcy case.
Generally, auctions of companies in bankruptcy aim to produce the most benefit for creditors. However, a sale that substantially reduces competition could be subject to a challenge from other government entities.
The state Attorney General’s Office said it had no information to provide regarding a potential combination of Oahu’s two biggest commercial waste companies, according to spokesman Joshua Wisch.
In 2003 the office said it would review a takeover of Horizon Waste Services of Hawaii Inc. by Honolulu Disposal, according to a Honolulu Star-Bulletin story that said Horizon controlled
51 percent of Oahu commercial disposal contracts compared with 28 percent for Honolulu Disposal.
The Star-Bulletin story also noted that a predecessor to Horizon, Browning-Ferris Industries Inc., drew scrutiny over competitive issues in 1998 when it bought the trash hauling business of its biggest local competitor, Waste Management Inc.
And in 1991 Honolulu Disposal sister company Alii Refuse Corp. pleaded guilty to federal antitrust charges and admitted conspiring with garbage collection companies in the 1980s to inflate prices by not competing in parts of Oahu, the 2003 story said.
An executive of Honolulu Disposal didn’t respond to a request Tuesday for comment on acquiring Rolloffs. Chuck Choi, a bankruptcy attorney representing the company, declined comment.
