Former FBI director appointed examiner of Okla.-based SemGroup LP

Journal Record, The (Oklahoma City), Oct 15, 2008 by Marie Price

Former FBI Director Louis J. Freeh was appointed Tuesday as an examiner to investigate bankrupt SemGroup LP's trading strategy, insider transactions, the possibly improper use of certain funds and assets to satisfy margin calls, and other issues.

Freeh is founder and senior managing partner of the Freeh Group International, a Delaware-based consulting firm, and its affiliated law firm, Freeh Sporkin and Sullivan LLP.

Freeh's appointment was approved in an order from Delaware bankruptcy Judge Brendan Shannon, who gave the go-ahead to appoint an examiner last month.

In his September order, Shannon also said the examiner would report on whether any directors, officers or employees of SemGroup participated in fraud, dishonesty, incompetence, misconduct, mismanagement or irregularity in management of the company's affairs.

U.S. bankruptcy trustee Roberta DeAngelis sought appointment of an examiner in August.

Freeh has about four months to complete the investigation, unless the court extends the time period for the examiner to complete his work.

SemGroup and 24 subsidiaries filed for Chapter 11 bankruptcy protection in July. At the time, it reported $2.4 billion in oil- future trading losses, among other financial problems.

Freeh was director of the FBI from 1993-2001, appointed to the post by President Bill Clinton. After leaving the FBI, Freeh became vice chairman, general counsel and ethics officer for MBNA America Bank. He left the bank in 2006 after its acquisition by Bank of America. Prior to his FBI service, Freeh was an assistant U.S. attorney and federal judge.