Tulsa World: SemGroup could have new CEO this year

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SemGroup could have new CEO this year
The energy company asks a court to OK its search for top execs.

IN OR OUT?
Terry Ronan: The current CEO has been in charge of day-to-day operations throughout the bankruptcy process.

By ROD WALTON World Staff Writer
Published: 5/15/2009 2:25 AM
Last Modified: 5/15/2009 6:58 AM

Complete coverage: Read all the stories and documents related to the SemGroup collapse.

SemGroup LP could have a new CEO by fall. The bankrupt Tulsa energy company wants court approval to hire a worldwide search firm to find two top executives and a board of directors as it emerges from Chapter 11 bankruptcy later this year.

The new hirings would include a CEO, a chief financial officer and six members of the board of directors, according to the motion filed Wednesday in U.S. Bankruptcy Court in Wilmington, Del. A SemGroup spokesman would not elaborate on the filing Thursday.

It was not known whether the motion meant that current CEO Terry Ronan would leave the company after it reorganizes later this year. Ronan has been in charge of day-to-day operations throughout the bankruptcy process.

If approved, search firm Russell Reynolds Associates Inc. could receive more than $800,000 in flat fees for helping SemGroup find new executives and board members.

"RRA is widely recognized as an industry leader in recruiting senior executives and developing boards of directors," the motion states.

RRA Americas' co-leader Ton Lumbra will lead the search. The team already is working on a timeline to meet the emergence from bankruptcy targeted for September, Lumbra noted in an April 28 letter to the Kaye Scholar law firm advising SemGroup.

"We

recommend that the board searches commence immediately with the initiation of the research phase of the project," Lumbra wrote. "We recommend the research phase of the searches to recruit the CEO and CFO commence in mid- to late May.

"This will allow the board assignment to build early momentum and provide the opportunity to select prominent directors who can positively impact the subsequent recruitment of talented CEO and CFO candidates," he added.

The executive search committee, which includes debtor-in-possession lenders and other creditors, hopes to select board directors by August, according to reports. Some of those directors could be involved in the latter stages of the CEO and CFO selections.

Friday is the deadline for SemGroup's exclusive rights to file its own reorganization plan. In a March memo to employees, Ronan hinted that privately held SemGroup might emerge from bankruptcy as a public entity focused on its SemCrude unit.

Ronan joined SemGroup in March 2008 as a finance executive. He was named CEO after co-founder Tom Kivisto was removed from the post shortly before the company's July 22 filing for Chapter 11 bankruptcy protection.

Fellow SemGroup co-founder Gregory Wallace was the original CFO, and he, too, is no longer with the company.

A U.S. examiner's report released last month accused Kivisto and Wallace of keeping SemGroup's risky futures trading strategy secret and misleading creditors.

Both Kivisto and Wallace refused to answer the examiner's questions, but both later denied any wrongdoing. The Securities and Exchange Commission also is investigating SemGroup's collapse.

SemGroup lost at least $2.4 billion in failed short positions on the oil futures market, according to reports. It also owes another $3.5 billion to creditors, vendors and producers, records show.

SemGroup does not currently have a CFO, a spokesman said. Lisa Donahue has served as chief restructuring officer since her firm, AlixPartners, was contracted last summer to help the company manage operations during the Chapter 11 bankruptcy process.

Russell Reynolds Associates has recruited executives to other restructured companies such as Kaiser Aluminum, Northwest Airlines and Calpine Corp., according to court records.

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

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	Report Comment Herbie, Stillwater (5/15/2009 6:59:36 AM) $800,000 to find new executives? In a recession? When all kinds of people are looking for work? This just illustrates the "think-alike" stupidity of the corporate world.
	Report Comment Arbythree, Tulsa (5/15/2009 11:09:38 AM) Great comments. I was really thinking that SemGroup would be gone before a new CEO came in.
	Report Comment don't be fooled, (5/15/2009 12:19:26 PM) Absolutely ridiculous to spend money on a recruiting firm. It's $ they don't even have. Clearly, someone like Wallass is making the decisions. SemGroup needs to lay down and die. The people still working there must be there only to collect the paycheck. Give it up, your gravy train has crashed.
	Report Comment Madd_Maxx08, (5/15/2009 12:58:46 PM) dont be fooled, Horrible of you to say, none of us left here at Semgroup had anything to do with its downfall, most of us left are here because we do not have anywhere else to go. If you were a riffed employee or lost money on the stock like I have, I apologize and wish you well for the future. But, please dont hate on the rest of us left here.
	Report Comment Hawktalk, (5/15/2009 3:04:28 PM) Madd_Maxx08: Why do I get the feeling the fix is in? For $800,000, they could make up my stock loss and those of a couple hundred others. And the bonuses now being stacked up for the remaining executives (bless them) might go to cover some of the debt holders. Now SemMaterials is being sold for chump change. The remaining suits and their consultants have milked this baby to the ends of the earth and everyone in Tulsa knows it.
	Report Comment black gold, (5/15/2009 11:53:04 PM) Madd Maxx08 As someone living with a riffed employee, I don't think any of us let go in August or there after hate you or most of the rest of the rest of the little people left at Sem. We all know that 99% of the employees were loyal hard working honest people. Sad it is that 1% or less that caused such havoc in so many peoples' lives. I think those of us booted out have mixed emotions towards those who are left: envy that you are still collecting a paycheck and benefits (Cobra at $1540/month for the family plan is a bit tough with no income) and sympathy that you have to go to work each day and wonder who will be next to go, will you still have a job tomorrow, etc. Good luck to all of you and I hope that "less than one per cent" gets theirs.

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