October 7, 2008
Judge Approves Appointment of Committee in OKC-Based SemGroup Bankruptcy
By Marie Price
A Delaware bankruptcy judge approved Friday appointment of a committee to represent oil and gas producers who have not been paid in the SemGroup LP case.Attorney Steven Bugg estimated that the number of parties with claims is in excess of 1 million, parties who have not been adequately represented in the case.
He said the committee will represent both royalty and working- interest owners in the case.
Bugg said the court recognized the appointment of such a committee as an extraordinary remedy.
"It's very rare, but we proved our case and showed that it was necessary to have these interests represented," he said.
The U.S. bankruptcy trustee in the Chapter 11 case will appoint a committee, which Bugg said will probably comprise about seven different companies.
"That will give them a greater voice," he said.
"There will now be a committee that will have an obligation to communicate with the interest owners and also represent their interests."
In September, bankruptcy Judge Brendan Shannon issued an order seeking to compensate companies who sold oil and other goods on credit to SemGroup during the 20 days before the company filed bankruptcy.
It has been estimated that SemGroup owes up to $1 billion to producers.
Shannon's orders established a 45-day window for a reclamation procedure, in which producers can file a claim if they are owed for goods SemGroup received during that 20 days.
SemGroup has the right to review or challenge claims.
Facing $2.4 billion in oil hedging losses and $7.5 billion in liabilities, which included $3.1 billion in total debt, SemGroup LP filed for Chapter 11 bankruptcy reorganization protection for itself and 24 of its subsidiaries on July 22.
Originally published by Marie Price.
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