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SemGroup branch wants debt paid(Tulsa World (OK) (KRT) Via Acquire Media NewsEdge) Aug. 30--Read previous stories and court filings about SemGroup. The once tight relationship between SemGroup LP and its public subsidiary, SemGroup Energy Partners, has suddenly unwound into a legal battle of words over missed payments by the bankrupt parent company and counterclaims that the public firm's allegations are not justified. At the heart of disputes between the Tulsa-based companies is a fight for survival. SemGroup LP is under Chapter 11 bankruptcy protection after losing billions on oil futures trades, while its cash-flow constriction has pushed SemGroup Energy Partners, also known as SGLP, into credit default and fears about its future. "SGLP's good faith and the debtors' financial impairment cannot be seriously questioned," states a court motion filed Friday by SGLP asking for advance payment from the parent SemGroup. "The objections attempt to marginalize the potential harm to SGLP and its need for adequate protection." The public company argues that SemGroup LP failed to pay SGLP about $15 million owed for services prior to the July 22 bankruptcy filing. SemGroup Energy Partners previously derived about 80 percent to 90 percent of its revenue -- more than $100 million annually -- from oil and asphalt storage and transport services for the parent company. A pair of late-coming creditors, Manchester Securities and Alerian Capital Management, took board control of SGLP last month after SemGroup LP defaulted on a pre-bankruptcy $150 million loan by the two hedge funds. Those board members and SGLP managers say they want to continue operating the company. They revealed last week that they had found two customers to replace some of the parent's business but still have "substantial doubts" about continuing "as a going concern," according to a filing with the federal Securities and Exchange Commission. U.S. Bankruptcy Judge Brendan L. Shannon of Wilmington, Del., could rule Tuesday on SGLP's request for advance payment from its parent company. SemGroup LP, meanwhile, disputes its subsidiary's request, noting that it offered a one-month line of credit to SGLP equal to asphalt storage charges for the same period. The parent company also says it owed only about $4.6 million in net fees to the public entity. "SGLP has failed to prove whether it acted in good faith and whether the debtors' ability to perform was 'impaired' or 'unsatisfactory,'" SemGroup LP's attorneys wrote in its own response this week. SemGroup LP spun off many of its oil and asphalt storage and transport assets -- valued at $400 million to $500 million -- to form SemGroup Energy Partners last year. The new company was taken public in July 2007 and offered a secondary sell of units earlier this year. Rod Walton 581-8457 [email protected] To see more of the Tulsa World, or to subscribe to the newspaper, go to http://www.tulsaworld.com. Copyright (c) 2008, Tulsa World, Okla. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |