PES creditors fight to reject refinery sale to Hilco - court documentsReuters | Updated: 23-01-2020 23:51 IST | Created: 23-01-2020 23:12 IST
Creditors of bankrupt Philadelphia Energy Solutions are opposing the sale of its oil refinery to Hilco Redevelopment Partners, saying another developer made a more lucrative bid for the site, according to court documents filed on Thursday.
Industrial Realty Group submitted a bid of $265 million during an auction last week to sell the idled refinery site, $25 million more than Hilco's bid, according to filings by law firm Brown Rudnick LLP in United States Bankruptcy Court for the District of Delaware. PES did not immediately respond to a request for comment.
The refiner announced on Wednesday that it agreed to sell its 335,000 barrel-per-day refinery, the largest and oldest on the U.S. East Coast, to Chicago-based real estate developer Hilco, naming Industrial Realty Group as a back-up bidder. PES's unsecured creditors, which include companies that had supplied contract work to PES, as well as workers' unions employed by the refinery, have pushed for a buyer that would restart the complex.
Hilco's proposal for the more-than 1,300-acre (530-hectare) site would result in a permanent shutdown of the plant, Brown Rudnick said, leaving those contractors and union members out of work. The attorneys did not say whether Industrial Realty Group intended to revive any or all of the idled refining complex, which shut over the summer after a June fire destroyed one of its key fuel processing units. PES filed for Chapter 11 bankruptcy in July.
PES's bankruptcy plan, which includes the Hilco agreement, is scheduled to be submitted for court approval on Feb. 6. PES creditors will also vote on whether they approve of the plan. If creditors reject the plan, that would put pressure on PES to prove its bankruptcy proposal is the best option for paying back creditors, the court filing said.
PES's unsecured creditors also took issue with other elements of the plan, including bonuses for refinery executives and that it fails to resolve a $1.25 billion insurance dispute.