Tulsa World: SemGroup plans advancing

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SemGroup plans advancing
Would-be suitor will present his version, while the company has filed its in bankruptcy court.

By ROD WALTON World Staff Writer
Published: 6/20/2009 2:24 AM
Last Modified: 6/20/2009 4:09 AM

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

New York billionaire John Catsimatidis on Tuesday will present a reorganization plan for bankrupt SemGroup LP, his spokesman said Friday.

Catsimatidis, a would-be bidder for the company, already has talked about the plan with some of the Tulsa energy company's creditors. Now, his side has invited SemGroup representatives, bankers and two other groups to a meeting in New York.

No specifics were available by deadline, but Catsimatidis reportedly will lay them out later.

"There is a plan," spokesman Gerald McKelvey confirmed. "It has been shared with pretty much everybody" in the key creditor groups.

A SemGroup spokesman, however, said the company's lawyers confirmed the existence of that plan during a court hearing Friday in Wilmington, Del. Catsimatidis and SemGroup CEO Terry Ronan are locked in a court battle over who has the right to control the company.

SemGroup LP last month filed a proposed reorganization plan in Delaware bankruptcy court. Judge Brendan L. Shannon could rule on the adequacy of the plan's disclosure statement next Thursday, only two days after the Catsimatidis meeting.

The arguments over control of SemGroup will be heard on Friday.

S

emGroup officials, bankers, producers and the

unsecured creditors committee are invited to the Tuesday meeting, according to reports.

The producers group opposes SemGroup's current reorganization plan, while the unsecured creditors support it.

The SemGroup plan focuses on the company emerging from Chapter 11 in the third quarter as a publicly traded entity, mostly owned by secured creditors such as banks. SemGroup would offer $2.27 billion in cash and equity to repay creditors.

Catsimatidis gained a majority of SemGroup's management committee seats late last year. He missed several self-imposed deadlines for delivering a reorganization plan, blaming it on opposition from Ronan and the company's court-approved consultants.

The billionaire points to his own history in buying United Refining Co. and guiding it out of Chapter 11 bankruptcy in the late 1980s as proof he knows how to save SemGroup. He also dismisses SemGroup consultants as professionals whose only interest is taking millions in fees out of the struggling company's coffers.

The SemGroup lawsuit against Catsimatidis counters that he violated confidentiality rules about the negotiations and also put a chill to the competitive bidding process by seeking publicity of his own efforts.

His group also is accused of trying to set up a secret meeting with some SemGroup executives, according to court records.

Catsimatidis' side countered that Ronan has wrongly thwarted their efforts. He owns five of nine management committee seats, although the Carlyle Riverstone hedge funds owns three seats and veto power over major decisions, according to reports.

SemGroup spokesman Tom Becker said the company's attorneys were not certain if they will be at Tuesday's meeting in New York. Several key figures are being deposed in the Ronan-Catsimatidis court battle at the time.

Meanwhile, energy giant ConocoPhillips joined the list of large and small producers that are objecting to SemGroup's reorganization plan and disclosure statement. The plan must gain court and creditor approval.

ConocoPhillips' objection filed Friday alleges the SemGroup disclosure is too vague about how it deals with counterparties. The Houston-based ConocoPhillips bought oil from a SemCrude subsidiary, although SemGroup still owes at least $400 million to the producers who sold the oil from the wellhead, according to reports.

"Among its many flaws, the disclosure statement provides a generally inadequate description of the claims of contract counterparties like ConocoPhillips," the objection reads. "The debtors must cure this fundamental deficiency."

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

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Some reader comments for this story were copied from "Catsimatidis to unveil plan for SemGroup," which was published on 6/19/2009.

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O&Gtrader, ft. worth (6/22/2009 9:40:54 AM)

The one year anniversary of the SemGroup "trainwreck" is fast approaching.

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