SemGroup creditors question hedge loss legitimacy
NEW YORK, July 23 (Reuters) - A group of SemGroup LP creditors on Wednesday raised the prospect that unauthorized energy trading may have caused the $3.2 billion loss that sank the 12th-biggest U.S. privately held company.
Eleven lenders that participated in a $141 million secured term loan objected to SemGroup's request for permission to access cash collateral to maintain normal business operations in papers filed with the U.S. bankruptcy court in Wilmington, Delaware.
"The Court should note that whether or not the Debtors' loss-generating trading activity was authorized has implications for the payment waterfall with in the distinct collateral pools under the Debtor's secured credit facilities," wrote attorneys for the lenders.
SemGroup filed for bankruptcy on Tuesday after admitting $3.2 billion in trading losses on the New York Mercantile Exchange and over-the-counter energy derivative markets.
Included in SemGroup's losses was $290 million owed to the company to cover losses on the NYMEX incurred by a trading company owned by SemGroup's co-founder and former chief executive, Thomas Kivisto.
Kivisto was placed on "administrative leave" shortly after SemGroup's NYMEX account was transferred to Barclays Plc (BARC.L: Quote, Profile, Research) on July 16. The move of the account to Barclays forced SemGroup to recognize $2.4 billion in losses on its futures position.
A SemGroup spokesman said on Tuesday the company had not suspected any wrongdoing in the trading collapse. SemGroup had also not asked the authorities to investigate the implosion of the company, which Forbes.com said in 2007 was the 12th-largest privately held company in the United States.
SemGroup officials have said they plan to break up the company and sell off its assets quickly to repay creditors. (Reporting by Robert Campbell, editing by Matthew Lewis)
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