The motion, which also includes former SemGroup Treasurer Brent Cooper and a former chief accounting officer, Alex Stallings, asks that the $10 million policy cover legal costs for their defense against SemGroup and its unsecured creditors.

SemGroup paid a $178,957 premium for the policy, which covered executives from November 2007 to November 2008, reports show.

In other court action, nine current or former SemGroup employees filed suit Wednesday in Tulsa County District Court against the board of publicly traded SemGroup Energy Partners, seeking $1.3 million in incentive pay. The Tulsa County plaintiffs include Cooper, whom the U.S. Examiner previously accused of filing a false borrowing base report to SemGroup’s lenders.

Kivisto and others who filed the bankruptcy court motion argued that the insurance policy, called AIG Executive Liability coverage, is not the property of SemGroup LP. The Tulsa company filed for Chapter 11 bankruptcy protection July 22, 2008, in Delaware.

The motion says, “Bankruptcy courts within the Third Circuit consistently have shared the view that liability policy proceeds are not property of the estate, but rather property of the directors, officers and other individual insureds.”

Kivisto, Foxx and Wallace formed SemGroup in 2000 and

Kivisto was placed on administrative leave a year ago and was fired in October.

Wallace, who was SemGroup’s chief financial officer from the start, left on disability leave last year and is no longer employed by the company, reports show.

Foxx stepped down from his SemGroup duties last July but has remained the CEO of the publicly traded SemGroup Energy Partners, also known as SGLP. Kivisto, Foxx and Wallace altogether were paid more than $72 million in salary and bonuses during the 12 months before the bankruptcy, court records show.

Stallings was paid more than $850,000 during that period. Cooper also took disability leave in the days before the bankruptcy petition was filed, and he was paid $885,000 to run SemGroup’s day-to-day financial affairs during those 12 months, reports show. Judge Brendan L. Shannon will hear arguments on the insurance request July 30.

In Tulsa, Cooper joined other current and former SemGroup employees to file the state court lawsuit alleging that SGLP reneged on promises to give partnership units as incentive pay. He is asking for $436,000.

Other plaintiffs in the Tulsa County lawsuit are former SemMaterials President Frank Panzer, former SemEuro President Randy Majors, and former Executive Vice President Timothy Purcell; the former oil futures traders Mia Oven, James Coen and Darrell Weakland; and SemStream President Larry Payne and SemGas President Timothy O’Sullivan. Those eight seek $109,100 each, the court records show.

Those plaintiffs allege that SGLP’s general partners, also known as the board of directors, offered them “phantom units” when the company went public July 2007. Those phantom units were to become actual shares of SGLP, but the hedge funds that later took control of the general partner withdrew the offer in August 2008, the petition reads.

“The decision of the board of directors of Energy Partners to not distribute to plaintiffs the phantom units which had vested was without foundation, malicious, in bad faith and in reckless disregard of the rights of plaintiffs,” the petition states.

SGLP’s spokesman Brian Cropper said the partnership, which is not part of SemGroup LP’s bankruptcy and no longer under the control of the parent company, could not comment on “active litigation.” However, SGLP noted in a July 2 filing with the Securities and Exchange Commission that the current and former employees had filed claims that were denied by the Oklahoma Department of Labor.

“Our general partner intends to continue to vigorously defend these claims,” the SEC filing states.

Oven and Coen were traders for SemGroup’s oil futures accounts on the New York Mercantile Exchange. The trading positions, guided by Kivisto, crippled the company, yet Coen and Oven received bonuses of $2 million and $1.5 million, respectively, two years ago, the U.S. Examiner reported.

The report also said Oven had an “intimate relationship” with Kivisto, who is married. Oven has denied any wrongdoing.

Panzer was the president of the SemMaterials asphalt unit from 2005 until his removal last year. He now is involved with Road Science LLC, an affiliate of Ritchie Capital Management, a part owner of SemGroup that purchased SemMaterials’ trademarked products such as NovaChip and Strata.

SemGroup LP spun off some of its oil and asphalt terminal, pipeline and trucking assets to form SGLP and take it public in July 2007. The hedge funds Manchester Securities and Alerian Capital Management took control of SGLP’s general partner last July after the parent SemGroup lost its credit line and defaulted on a $150 million loan, according to reports.

In another development, a Tulsa producer, New Dominion LLC, announced Thursday that it has appealed the bankruptcy court’s ruling that gives priority to secured lenders and not producers. SemGroup owes at least $400 million to producers for oil and gas bought on credit in the time around the bankruptcy filing, reports show.

SemGroup’s proposed reorganization would pay the producers only about 8 cents on the dollar. Secured creditors would receive about 95 percent of the reorganized SemGroup’s equity, reports show.