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Next SemGroup leaders to join creditors meeting
Norm Szydlowski
By ROD WALTON World Business Writer
Published:
9/9/2009 10:00 AM
Last Modified: 9/9/2009 9:31 PM
Complete coverage:
Read all the stories and documents related to the SemGroup collapse.
The men waiting to take over SemGroup LP’s two most important positions hope to start work almost immediately and will take part in a crucial meeting with creditors Thursday, officials said.
CEO Norm Szydlowski and Chief Financial Officer Philip Reedy were selected to lead SemGroup once it emerges from Chapter 11 bankruptcy. The Tulsa midstream energy company hopes to have them on board as consultants to current CEO Terry Ronan as soon as possible.
SemGroup said in a statement, “The company will file a motion with the court for authority to immediately retain Szydlowski and Reedy as consultants to work alongside Ronan for the remainder of the Chapter 11 restructuring.”
The three will have plenty to work on. SemGroup is seeking court approval to emerge later this year as a publicly traded crude oil storage and transport outfit offering about $2.26 billion in cash and equity to creditors.
A confirmation hearing is set for Oct. 26, but the reorganization plan — already amended twice this year — faces opposition from various quarters.
The secured lenders, such as Bank of America, will meet with the Official Producers Committee in a mediation hearing Sunday with U.S. Bankruptcy Judge Kevin Goss of Wilmington, Del., where SemGroup is chartered.
The secured creditors want producers to
accept an amended plan offering up to $253 million for oil and gas the producers sold on credit around the time of the company’s July 2008 bankruptcy. Producers from several states, including Oklahoma, originally sought more than $400 million. Reports say the current plan may pay them as little as 8 cents on the dollar.
U.S. Bankruptcy Judge Brendan L. Shannon ordered both sides into mediation with his colleague Goss. He told creditors and producers’ attorneys Wednesday that they need to get together quickly.
“We are going to get as many people as we can; others can appear by phone,” Shannon said in his Wilmington courtroom. “It’s short notice, but I believe that the interests of all parties are best served by at least attempting this effort.”
Szydlowski and Reedy are expected to attend an exit financing meeting Thursday in New York, reports say. Ronan will stay on as the CEO until SemGroup emerges from Chapter 11.
Ronan has been in charge since the collapsed company placed its founding CEO, Tom Kivisto, on administrative leave and later fired him. SemGroup is suing Kivisto on allegations of mismanagement, misuse of funds and a risky trading strategy that led to bankruptcy.
Ronan, a veteran of Bank of America and Merrill Lynch, joined SemGroup in March 2008, only four months before the bankruptcy.
Founding Chief Financial Officer Gregory Wallace, who also is being sued by his former employers for some of the same alleged offenses, took disability leave and is no longer on SemGroup’s payroll, reports say.
SemGroup’s future remains uncertain, but Szydlowski has tackled bigger problems. The second Bush administration appointed him as an adviser to Iraq’s Ministry of Oil to help rebuild that country’s energy sector after the U.S. invasion in 2003.
Szydlowski was named the CEO of Colonial Pipeline in 2006 and retired at the beginning of this year. He spent 23 years earlier at Chevron Corp., rising from marketing operations to vice president of refining by 2002.
He also has served in several nationally prominent roles — as the chairman of the Biofuels Infrastructure Task Force and, along with former Oklahoma Gov. Frank Keating, as a member of the National Commission on Energy Policy.
He was even called to testify nearly two years ago before the U.S. Senate Committee on Energy and Natural Resources. Szydlowski, who then headed Colonial Pipeline, stressed the importance of congressional support for greater technical school training for potential employees and touted the importance of an immigrant work force and finding ways to attract new workers to the business.
“Too often, the U.S. energy industry is portrayed as uninterested in the future, as passive and as part of the problem, not the solution,” he testified Nov. 6, 2007. “The truth is our industry exists to serve the American people by providing an essential commodity.”
Szydlowski has a tenuous Tulsa connection. His successor at Colonial Pipeline is Tim Felt, who left Explorer Pipeline, a Tulsa company, to take the job.
Explorer’s current CEO, Rod Sands, said of Szydlowski, “I know he’s a good man.”
Reedy had been the chief financial officer of Citgo Petroleum Corp., a Houston subsidiary of state-owned Petroleos de Venezuela SA. He has a bachelor’s degree from the University of Tulsa.
The new board of directors, which will include Szydlowski, also was appointed to replace the management committee that had included Kivisto and Wallace.
The other board members will be Chairman John F. Chlebowskis of NRG Energy Inc.; Ronald A. Ballschmiede, the chief financial officer of Chicago Bridge & Iron Co.; Sarah Barpoulis of Interim Energy Solutions LLC; Stanley Horton, the CEO of Semoran Holdings LLC; Karl Frederick Kurz of Anadarko Petroleum Corp.; and Thomas McDaniel, a retired energy executive.
By ROD WALTON World Business Writer
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