SEMGROUP: ONE YEAR LATER
SemGroup Spiral
by ROD WALTON | World Staff Writer
Photos | Tulsa World file

TOM KIVISTO
‘Whiz kid’ co-founder flopped
Tom Kivisto was the whiz kid who turned the energy world on its ear when he co-founded SemGroup and built it into a midstream giant. By July 2008, however, Kivisto’s house of oil futures trading cards crashed into a heap of debt. He was placed on leave in mid-July and fired later that year. His personal wealth, estimated at more than $200 million, may be dwarfed by the $300 million or more he allegedly owes SemGroup for oil futures trading done on behalf of his personal ventures. He has denied any wrongdoing and is still occasionally spotted around Tulsa.
GREGORY WALLACE
Co-founder floating in lawsuits
The reputed financial mastermind behind SemGroup, co-founder Wallace was paid $16.8 million in the 12 months prior to the company’s bankruptcy. He left on paid disability leave shortly before the Chapter 11 filing and reportedly still lives in Tulsa. The examiner’s report accused Wallace of misconduct as SemGroup’s chief financial officer. He did not talk to investigators. Wallace, however, recently accused the company of “throwing him under the proverbial bus” and making him a target of the probe. The co-founder also is fighting a lawsuit filed against him by SemGroup’s creditors.
KEVIN FOXX
Survived to run SGLP
Kevin Foxx joined his Foxx Transports trucking firm with Tom Kivisto’s Eaglwing energy trading operation to form what became SemGroup in 2000. He was accused by Examiner Louis Freeh of helping mismanage the company into bankruptcy and resigned his SemGroup executive and board positions in July 2008. Foxx, however, survived that ordeal and kept his role as CEO of publicly traded subsidiary SemGroup Energy Partners. SGLP did not file for bankruptcy and later gained a credit.
TERRY RONAN
Overseer opposes takeover
The longtime New Englander may or may not have known what he was getting into when he left Merrill Lynch Capital to oversee SemGroup's finances in March 2008. By May, Ronan was expressing fears about depleted cash-flow and, two months later, he was named CEO amid the financial collapse. Ronan has overseen all of SemGroup's Chapter 11 journey, including the sale of its SemMaterials and SemFuels assets. He also has opposed New York billionaire John Catsimatidis in the suitor's highly publicized attempt to take control of the company, although both men met to discuss their respective reorganization efforts recently.




JOHN CATSIMADIS
Business meddler or savior?
The brash New Yorker originally made his fortune in the grocery business, but later branched out to real estate, aviation and energy. Catsimatidis believes that he knows best how to guide SemGroup through Chapter 11 reorganization, just as he did with United Refining Co. in the late 1980s.His reorganization plan, however, is known only to a few insiders and has not been publicly dissected. Catsimatidis is still confident of victory in his battle for SemGroup. “I’m an optimist,” he said recently. “Hopefully sanity will prevail.”
PROBES
Examiner blamed Kivisto for firm’s demise; SEC, U.S. Attorney still on it
Former FBI Director Louis Freeh’s appointment as examiner investigating SemGroup’s bankruptcy gained some national attention, but it was his April 15 report which turned the most heads. The 258-page document went straight to the top, blaming CEO Tom Kivisto for SemGroup’s demise through what it called a secretive, risky futures trading strategy that put the company at least $2.4 billion to $3 billion in the hole. The U.S. Attorney’s office in Tulsa and federal Securities and Exchange Commission are still looking into the downfall. SemGroup’s Unsecured Creditors Committee and various class-action plaintiffs also are trying to get more information about what happened.
THEN AND NOW
Future SemGroup is likely to be a leaner regional player in oil and gas, if...
Who knows what the future holds for SemGroup LP? The umbrella company, one of the nation’s biggest privately held firms a few years ago, no longer has the SemMaterials asphalt unit and likely will sell its SemFuel assets to QuikTrip Corp., Magellan Midstream Partners and others.The future SemGroup may not boast the international, wide-ranging efforts in asphalt, oil, gas, residual fuels, pipelines, trucking and commodities’ trading. Instead, the SemGroup brand may be smaller, more regional and focused on crude oil storage and transportation. If it survives...



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