SemGroup's rise and fall and rebirth is well documented, but many of those who played an outside role during its dark days themselves have hit the bull's-eye of notoriety recently - whether they wanted to or not.
Barclays: The English banking firm is known as the beneficiary of SemGroup's desperation in the summer of 2008. Margin calls totaling more than $2.4 billion on the oil futures position forced SemGroup to sell its trading book to Barclays for a $143 million fee in July 2008.
The move forced SemGroup to take that massive hit on its accounting books. Creditors dropped them, and bankruptcy followed.
As fate would have it, oil prices reached an all-time high of $147 per barrel that month and then receded downward, turning Barclays' short position into a winner. The banking firm eventually profited by about $3 billion, according to reports.
SemGroup Litigation Trustee Bettina Whyte sued Barclays in New York federal court last week, asking Barclays to return that $143 million fee to creditors.
Barclays, meanwhile, is dealing with its own crisis, which may swamp the controversy surrounding SemGroup four years ago. CEO Bob Diamond resigned amid allegations that Barclays manipulated a key interest rate.
Bank of America: SemGroup LP's primary lender in 2008, the bank pulled the plug on the company's credit line and helped force it into bankruptcy. Bank of America also was administrative bank during the Chapter 11 process.
The vaunted financial institution hit some embarrassing bumps in its own road over the past five years. Bank of America sustained major losses during the mortgage lending crisis after buying Countrywide Financial and Merrill Lynch, eventually requiring a $45 billion federal bailout in 2008, which it paid back with profit a year later.
Bank of America laid off more than 30,000 employees last year.
JP Morgan Chase: The U.S. banking firm, a SemGroup creditor during bankruptcy days, is under pressure after one of its traders took a derivatives position on corporate bonds that has cost at least $4 billion. CEO Jamie Dimon has kept his job, for now, but analysts wonder how long if financial losses from the "London Whale" hedging scandal continue to mount.
Louis Freeh: The former FBI director was called on by U.S. Bankruptcy Judge Brendan L. Shannon to investigate and deliver a report on how SemGroup collapsed. He came back in April 2009 with a lengthy effort accusing Kivisto of leading a risky and secretive futures trading strategy he hid from creditors, double dealing to benefit his own private businesses and having a "personal relationship" with a female trader in his office whom he also paid a high salary.
Freeh lately is best known as the investigator into Penn State's child abuse scandal. His report condemned university officials for allegedly hiding details about assistant coach Jerry Sandusky's sexual crimes against boys.
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
Original Print Headline: Some key players are back in news
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