POCATELLO — While he will eventually release a written decision, U.S. Bankruptcy Judge Jim Pappas did return an oral decision Tuesday, denying a motion to sell the Hoku Materials facilities in Pocatello to contractor JH Kelly for nearly $5.3 million.

According to two attorneys who were part of Tuesday’s hearing, Pappas expressed concern that the auction held last month was not conducted in the exact terms expressed in his lengthy order. The attorneys, who asked not to be named, also said Pappas was concerned that more than 300 lots in the piecemeal auction failed to garner any bids.

Tuesday’s hearing at the U.S. District Court in Pocatello started at about 9 a.m., lasting more than three hours, including a break at about 11:40 a.m. According to court documents regarding the hearing, the judge denied the motion without prejudice “for the legal and practical problems stated on the record.”

A one-page written notice was also filed in the court record showing the judge’s oral decision denying the motion.

JH Kelly officials and attorneys for Gary Rainsdon, the Hoku bankruptcy trustee, could not be reached for comment.

Hoku filed for bankruptcy in July and the court came to a relatively quick decision that the assets should be auctioned off. That auction was held Oct. 23 and 24. The first day featured an auction for the property in its entirety, and the start of the piecemeal auction, which broke the facility down into 1,364 individual lots.

The auction for the entire facility closed on Oct. 23 while the piecemeal auction continued into Oct. 24. The top bid for the entire facility came in at $3.7 million while the total of the piecemeal auction came in at nearly $4.8 million, roughly 23 percent higher than the bid for the entire facility.

According to the trustee’s motion to sell the entire facility to JH Kelly, multiple parties contacted him after the conclusion of the piecemeal auction, requesting the auction be reopened to allow overbids for the entire facility.

JH Kelly came out at the top of that overbid process with a bid of $5.273 million.

Citing a bid in excess of the piecemeal auction and the fact that selling the entire facility means “Eliminating any risk associated with dismantling or demolition of property,” Rainsdon recommended accepting JH Kelly’s overbid.

JH Kelly told the Journal last week that should it win the purchase of the entire facility on Tuesday, the company would do as it stated earlier in the fall.

“We want to work with the City of Pocatello and the Bannock County Economic Development Commission to mitigate the sting of Hoku/Tianwei’s broken promises, help them attract a new user to the property and recoup as much as we can of the monies that we are owed,” the company said in a release last week.

Considering the Hoku assets still need to be disposed of, one of the attorneys believes the plant is likely headed for a new auction.