Delaware bankruptcy court OKs SemGroup LP severance packages

Journal Record, The (Oklahoma City), Aug 19, 2008 by Marie Price

A Delaware bankruptcy judge approved severance packages Monday for 230 laid-off employees of SemGroup LP, which filed for Chapter 11 reorganization July 22.

Last week's layoffs included about 110 workers out of about 400 employed by SemGroup in Tulsa.

The terminations amounted to a bit more than 10 percent of the work force of SemGroup, which has about 2,000 employees companywide.

Spokesman Lance Ignon said Judge Brendan Shannon approved packages equal to two weeks' pay, at a total cost of about $1.1 million.

Ignon said final approval of a debtor-in-possession financing package to help keep SemGroup afloat was postponed until Sept. 10.

Although not part of the bankruptcy of the SemGroup parent and 24 of its subsidiaries, publicly traded SemGroup Energy Partners LP (SGLP) indicated in a filing last week with the Securities and Exchange Commission how the proceeding has affected it financially.

On Friday, SGLP explained why it missed an SEC quarterly filing deadline, saying that SemGroup LP's bankruptcy, and SGLP's own default under a credit agreement, raise doubt about SGLP's ability to continue as a going concern.

SGLP gets about 82 percent of its revenue from services provided to the parent firm and its subsidiaries, is currently under SEC investigation and has had several class-action lawsuits filed against it. SGLP also failed to make a distribution to its unit- holders for the quarter that ended June 30.

In the SEC filing, SGLP said it is considering various alternatives, among them the sale of all or a portion of its assets.

At market closing Monday, SGLP last traded at $8.50 per unit, down 7 percent from Friday's closing price.

Bankrupt SemGroup LP has said it intends to sell off all of its assets.

The parent company acknowledged oil-future trading losses of about $2.4 billion when it filed bankruptcy. It listed assets of $6.14 billion, with liabilities of $7.53 billion.