Loma Co., a Louisiana compression molder that pioneered the use of plastic road mats for oil and gas fields, has shut down production and filed for Chapter 11 protection.
The move is the result of a legal battle with a minority shareholder, Newpark Resources Inc. of Metairie, La., which owns Loma's largest customer, Soloco LLC of Lafayette, La.
Loma opened its unconventional, $20 million molding plant in 1998 in Carencro, La., a rural area outside Lafayette. The company had a proprietary process to mold two-piece mats made of high density polyethylene. The mats weigh more than 1,000 pounds.
Paul Seaux, a former oil-field consultant who became Loma's president and chief executive officer, developed the technology, which uses a metal carousel and lift that transports aluminum molds of more than 7,000 pounds. The product replaces hardwood for use in mud-spackled areas where drilling is done.
Though the project was ballyhooed for its innovation and attracted the interest of the U.S. Defense Department and others, the plant has not made mats since May 2003.
Loma shut down production after Soloco reduced its orders from Loma, Seaux said in a Jan. 27 telephone interview. Soloco, a provider of services to access oil fields, said it had too much of the product in inventory.
Newpark Resources, a publicly held company, holds a 49 percent stake in Loma and provided funds to help build the plant. But in late 2002, Newpark's Soloco unit filed suit against Loma in Louisiana District Court in Lafayette, claiming that Loma had overcharged for its mats. In June 2004 a judge sided with Soloco, awarding the company $11.7 million in damages, according to a quarterly filing by Newpark. Newpark officials did not comment on the case when reached Jan. 28.
Loma filed for Chapter 11 protection Aug. 11 in U.S. Bankruptcy Court in Lafayette. The filing gives Loma time to appeal the judgment, Seaux said. Loma also is attempting to retain licensing rights for the product.
``It's all about licensing and patents and technology,'' Seaux said.
A trustee from Jackson, Miss., now runs the nearly vacant Loma operation, according to the bankruptcy court filing. Seaux would like to reopen the plant, but he said he might start a new operation.
``There are different ways that we could make the mats. The plant here still looks clean and pretty and ready to go. But we might have to take this elsewhere,'' he said.
Meanwhile, Soloco has developed its own plastic road mats for use on less-rugged applications than an oil field, according to its Web site. Those mats are injection molded.