SemGroup LP founder, former CEO sued for $12.8 million by Bank of

Journal Record, The (Oklahoma City), Jul 28, 2008 by Marie Price

SemGroup LP founder and former CEO Tom Kivisto and a Kivisto trust were sued for $12.8 million plus interest Friday by Bank of America.

The lawsuit involves a $15 million loan to the trust that was guaranteed by Kivisto and secured by the trust's limited partnership interest in SemGroup LP, according to the filing.

The complaint, filed in Tulsa federal court, says the loan was taken out in May 2006. On May 26 of this year, its maturity date was extended to Aug. 24.

The complaint mentions the recent financial difficulties of SemGroup, reports that Kivisto was replaced as president and CEO and that SemGroup was considering bankruptcy.

It also notes that stock prices for SemGroup's public subsidiary, SemGroup Energy Partners, fell 51.8 percent in one day.

"These events qualify as a material adverse change relating to the value of the security interest in SemGroup and defendant Kivisto," the document states.

On Tuesday, SemGroup LP and 24 subsidiaries filed for Chapter 11 bankruptcy reorganization.

SemGroup LP reported $2.4 billion in losses, including $290 million owed by a trading group owned by Kivisto.

Kivisto was placed on administrative leave July 17.

Terry Ronan is the acting president and CEO of SemGroup LP.

The Securities and Exchange Commission and the U.S. attorney's office in Oklahoma City have launched an investigation, seeking SemGroup Energy Partners financial records and other documents concerning SemGroup LP's collapse.

SemGroup Energy Partners, which is not part of the bankruptcy proceeding, has also informed the SEC that it has cut contractual ties to the bankrupt parent company. Two investment companies have assumed SemGroup LP's controlling interesting in SemGroup Energy Partners.

Since the bankruptcy filing, several lawsuits have been filed against SemGroup LP and related companies.

Kivisto could not be reached for comment.

The Associated Press contributed to this story.