Tulsa World: Kivisto to fight inquiry

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Kivisto to fight inquiry

RESPONDING TO SEMGROUP
Tom Kivisto: The lawyer for the former CEO of SemGroup asks a bankruptcy judge to deny the company's request for records about his role in the company's financial collapse. SemGroup has sought documents including company communications, wholly owned private firms, tax returns and outside investments.

By ROD WALTON World Staff Writer
Published: 11/11/2008 2:15 AM
Last Modified: 11/11/2008 2:32 AM

Read previous stories and court filings about SemGroup.

The attorney for fired SemGroup CEO and co-founder Tom Kivisto said Monday that his client is finally ready to fight back against his former employer.

"Enough is enough," Tulsa attorney John Tucker said. "I think they're just trying to continue their plan to make Tom into the scapegoat. It's absolute nonsense."

The onetime head of fast-rising and now bankrupt SemGroup LP is objecting to the company's request to personally question him and seek documents related to his oil futures trading practices. In fact, SemGroup has requested documents related to dozens of issues surrounding Kivisto. Those issues include his company communications, wholly owned private firms, tax returns and even outside investments in art galleries and a restaurant.

Kivisto's legal defense has gotten active after a period of relative silence following SemGroup's Chapter 11 bankruptcy filing July 22. Many have blamed the company's collapse on oil futures trading losses totaling $2.4 billion.

Kivisto's objection asked Delaware bankruptcy Judge Brendan L. Shannon to deny SemGroup's request for records about his role in the financial free fall. He argued that the company's investigation is too broad and duplicates work already being planned by former FBI Director Louis Freeh and the Official Committee of Unsecured

Creditors.

"Kivisto should not be subjected to multiple repetitive depositions on such overlapping and similar topics," the objection states.

Many creditors and shareholders have blamed Kivisto and SemGroup's traders for the company's problems. He was responsible for at least $290 million of those trading losses through Westback Purchasing Co., Kivisto's wholly owned firm, according to court records.

Tucker turned down a Tulsa World request to interview Kivisto, saying "not right now." He has not spoken publicly about the events leading to SemGroup's bankruptcy.

However, the attorney was adamant that SemGroup already should have everything it needs from Kivisto.

"They're saying we won't give them any documents, but everything we have that relates to SemGroup is in Tom's and his assistant's offices," Tucker said. "The company has had absolute control of all those files since July."

SemGroup removed Kivisto as CEO in mid-July and placed him on paid administrative leave without input into the company's day-to-day operations, according to reports. He was officially terminated late last month.

In its Oct. 28 motion seeking records from Kivisto and former SemGroup treasurer Brent Cooper, the company alleged that the two might have pertinent information about trading practices, compensation, outside projects and other issues.

"Good cause exists to conduct the proposed discovery," the motion read. "Despite numerous requests, the respondents have not voluntarily agreed to meet with the debtors to provide information about the estate."

Kivisto received $42 million in salary, bonuses and other compensation in the 12 months prior to SemGroup's bankruptcy filing. More than $300 million also was paid to Kivisto-controlled companies such as Westback and Eaglwing, according to court records.

SemGroup also wants information regarding Kivisto's involvement in outside investments such as Lean Gourmet LLC, Kivisto Niemira Gallery LLC and any company payments made to him or his wife, Julie Kivisto.

Kivisto, a rising star in the oil business with Koch Industries, started SemGroup in 2000 with co-founders Gregory Wallace and Kevin Foxx. By 2006, it was one of the nation's largest privately held companies, boasting revenues in the billions, according to reports.

SemGroup unraveled quickly this summer after rumors of debt problems sank stock in publicly traded SemGroup Energy Partners. Wallace was placed on disability leave just before the bankruptcy and has not returned to the company, according to court records.

Foxx remains CEO of the public SemGroup Energy Partners, also known as SGLP on the Nasdaq Stock Market. SGLP, which is now controlled by hedge funds Manchester Securities and Alerian Capital Management after the parent company defaulted on a loan, closed at $3.15 per unit Monday, down more than $20 from trading levels just days before the bankruptcy.

SemGroup Energy Partners has not released a quarterly earnings report since early May. Nasdaq has threatened to delist SGLP if it does not comply with Securities and Exchange Commission requirements about reporting.

Rod Walton 581-8457
rod.walton@tulsaworld.com By ROD WALTON World Staff Writer

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	Report Comment Harry, (11/11/2008 6:33:25 AM) hi mr. pot , this is mr. kettle
	Report Comment Dr. Strangelove, Tulsa (11/11/2008 7:12:33 AM) Haha- so true Mark Fact is, when a company slides into the ditch, for whatever reason, employees and investors seem to feel better if the blame can be leveled on one person, warranted or not.
	Report Comment Norman Bates, Bates Motel (11/11/2008 7:19:00 AM) I wonder what this guy's hiding that he has to fight an investigation. A big part of it is the millions he took out of the company when he knew it was spiraling south.
	Report Comment bearway, (11/11/2008 7:19:43 AM) "Kivisto should not be subjected to multiple repetitive depositions on such overlapping and similar topics," Oh yes he should, and they should be public, and every scoundrel involved should be deposed publicly as well. I heard that BOK lost a ton of cash in the deal as well. The shareholders should demand that every stone be turned to expose the snakes involved.
	Report Comment paleface, Ponca City (11/11/2008 7:57:25 AM) bearway Let us not let the snakes run...
	Report Comment Matt in BA, Broken Arrow (11/11/2008 8:06:49 AM) You know what is so fishy about SemGroup and the price of oil, since mid july, oil was around $147 a barrel and SemGroup was deep into these oil futures and hedge trading, they go bust as a result, now the price of oil has dropped to $62 a barrel. I think someone just wants to ask Tom what he knows about this mess, but he doesn't want to tell. Come on now Tom, let us know your secrets, how many times were you guys buying and selling the same tanker while it was on the way to the U.S. And who was on the other side helping you.
	Report Comment Hawktalk, (11/11/2008 8:31:43 AM) Matt in BA: $60 is exactly where TK bet crude would go. His prognostication was six months early...
	Report Comment chase, (11/11/2008 9:02:25 AM) Where are all the folks who early on were saying what a wonderful man,if he is not to blame,then who is?and where are all the oil specultors on wall street,their using the paper they were trading for other purposes now.
	Report Comment O&Gtrader, ft. worth (11/11/2008 9:05:13 AM) Matt in BA has been around some oil trading I see. Part of oil's coincidental decline after the SemGroup bankruptcy was that the traders in the pits were talking about Obama selling the SPR supply of oil as soon as he got elected. You don't want to be owning oil if 700,000,000 million barrels of the stuff is possibly going to be sold to refiners on a net-back basis. Pres. Clinton sold the SPR (lower volumes, though) twice to pay down the national debt.
	Report Comment Dr. Strangelove, Tulsa (11/11/2008 9:24:21 AM) Good comment O&G.
	Report Comment 007, (11/11/2008 9:45:48 AM) THIS GUY SHOULD BE WEARING A PROM DRESS AND DATING ALL THE GUYS ON D BLOCK, HE IS A CROOK AND THE LAW KNOWS IT, NOW THEY HAVE TO PROVE, OUR OWN LITTLE VERSION OF KEN LAY!!!!!!!!!!!!!!!!
	Report Comment Ray, (11/11/2008 10:01:27 AM) Thanks for the $4/gallon gas, TK. Notice how it has come back to normal since his epeculation was found out? How many small companies and individuals have been ruined because of Kivisto? Absolutely disgusting. Turn over all the rocks and watch his slimy things crawl out. TK is NOT an innocent party ~~ the people who were scre....d are.
	Report Comment Matt in BA, Broken Arrow (11/11/2008 10:28:35 AM) O&G good point, I didn't think of the possible selling from the SPR, it makes sense. And the good old SPR was still buying oil when the price was at its peak.
	Report Comment NOS, (11/11/2008 2:34:50 PM) Isn't oil bought in dollars...and isn't the dollar pretty weak right now, demand was high all over the world and other countries are buying oil on a weak dollar, getting more for their money. Also the global econmoy is slummping which is making deman lower. Just a thought.
	Report Comment miss midtown, tulsa (11/11/2008 4:09:08 PM) Oh My! The Emperor knows he has no clothes and if he answers the questions the whole world will know he's naked! Poor poor little man...
	Report Comment LocalBoy, B.A. (11/11/2008 5:13:47 PM) Hey, the poor guy is too busy for all of these questions. Do you have any idea how hard it is to find an 8-figure-paying job bankrpting companies? Even if you have his experience, jobs like that are just really hard to find.
	Report Comment trojan, T.B.D. (11/11/2008 9:24:03 PM) you all are a bunch of idiots. I'm glad all of you are so worried about the fall of SemGroup. I work there, and I've lost several thousands of dollars in investments, and I can't seem to find the need to pour fuel on the fire of speculation. It will all come out in the wash eventually, but until then, there's no use in speculating.
	Report Comment O&Gtrader, ft. worth (11/12/2008 9:48:44 AM) trojan TBD: Would you please use your influence and get SGLP to publish some financials? They are a little late.

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