Creditors fear they’ll recover little from SemGroup’s bankruptcy.
By ROD WALTON World Staff Writer
5/7/2009
Many oil and gas producers fear they may get only pennies on the dollar, if that, for the $400 million and more owed them by bankrupt SemGroup LP. But one of its attorneys remains optimistic about total payback.
“That’s the ballgame,” Tulsa attorney Gary McDonald said Wednesday during the Mid-Con Expo Energy Conference at the Cox Convention Center in Oklahoma City.
“One hundred percent recovery: That’s what the statutes intended,” he added. “I think the prospects for full recovery are very good.”
SemCrude and Eaglwing, two SemGroup subsidiaries caught up in the Tulsa energy company’s July 22, 2008, bankruptcy, owe hundreds of producers for oil and gas bought in the 50 days before the Chapter 11 filing. The producers group also includes thousands more people as operators, working interests and royalty owners, according to reports.
A key battle in Delaware federal bankruptcy court pits the producers against a mammoth group of secured lenders led by Bank of America. Those creditors backed a $2.5 billion credit line and hold secured claims on SemGroup’s assets, according to reports.
Oil and gas producers, McDonald pointed out, also are a large group but tethered to a variety of state laws governing those liens for product sold prior to bankruptcy.
Most of the oil and gas was sold to SemCrude and Eaglwing from Oklahoma, Texas, Kansas and New Mexico.