April 10, 2022 [JAMAICA OBSERVER] – Bloomberg Law this week reported that Limetree Bay Services LLC, the former owner of the troubled Caribbean oil refinery, has won court approval to send its bankruptcy wind-down plan to a creditor vote.
The Chapter 11 proceedings will see what is described as a consensual liquidation, after Limetree and its creditors reached an agreement.
As reported by Bloomberg, the US Virgin Islands-based company is proposing to liquidate and set up a trust to pay creditors after selling the shuttered refinery earlier this year to Jamaican company West Indies Petroleum Limited (WIP) for US$62 million.
Under the Chapter 11 plan, outlined by Bloomberg, secured lenders and general unsecured creditors would recover just a fraction of their claims against the company.
Limetree Bay Refinery is located on the south shore of St Croix. It is described as the largest refinery in the Western Hemisphere, targeting increasing global demand for its products.
LimeTree was shuttered in May 2021, when US environmental regulators identified foul odours and noxious gas releases as affecting local communities. The company then filed for Chapter 11 bankruptcy protection in the United States.
Under subsequent proceedings, experts identified the need to restructure approximately US$1.8 billion in debt. It was noted that the company needed a minimum of US$1 billion to enter viability.
The original auction for the refinery took place in the US Bankruptcy Court for the Southern District of Texas late in November 2021. Previously, competing bidder St Croix Energy won the first round in bidding for the refinery. However, Limetree Bay Refinery through its lawyers filed to reopen the auction as WIP showed good reason for missing the event. The chief executive officer had fallen ill and needed emergency medical attention in the days before the auction.
WIP was offering US$30-million cash upfront, which was superior to the offer of US$20 million by St Croix Energy. Both companies upped the ante in the second round. In the reconvened hearing in December, St Croix Energy bid $57 million in cash, but WIP’s $62 million trumped the offer.
WIP, incorporated in 2012, is in the ship bunkering business in the Caribbean and Latin American region. It targets growing demand for marine refuelling.
WIP has proposed a plan to seek a new agreement with US environmental regulators.
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