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Superior Sands Hit With Lawsuit

A lawsuit filed March 27 in Pennsylvania claims that Superior Silica Sands has failed to pay bills submitted by a company it hired to manage a frac sand transloading facility in San Antonio, and owes the plaintiff a total of nearly $25 million.

The lawsuit is the second such legal action filed against the sand company by one of its creditors in less than two weeks. In mid-March, an Eau Claire, Wis.-based contractor filed a construction lien against Superior Silica Sands in Barron County Circuit Court, claiming it is owed nearly $159,000 to work on the sand company’s frac sand processing facilities in the towns of Arland and Sioux Creek.

Court documents filed in Allegheny County, Pa., allege that in January 2015, Superior Silica Sands signed an agreement with Pennsylvania-based Modern Materials Services Inc., doing business as Arrow Material Services. The agreement called for Superior Silica Sands to provide Arrow 370,000 tons of frac sand per year at $8 per ton, to be processed in a pair of buildings managed by the plaintiff in San Antonio. The deal also called for the defendant to pay the plaintiff each month for expenses incurred by Arrow to lease and operate the transloading facility.

The suit alleges that Superior Silica Sands “has failed and refused to pay” Arrow for invoices worth nearly $390,000, primarily over the past two years. The suit asks the court to order Superior Silica Sands to reimburse Arrow for all of the money it is owed at present and over the remainder of the 10-year agreement.
The amount includes $2.96 million per year for annual tonnage ($17.76 million in all) and the rent Arrow will be required to pay for the transloading facility, $6.76 million.

The news comes after Superior Silica’s parent company, Emerge Energy Services, delayed its fourth-quarter stock report for 2018. Superior Silica is working with its lenders to refinance its debt, “and we are well into the process of doing that,” said Rick Shearer, chief executive officer.