CHRISTIANSTED — One of the bidders for the bankrupt Limetree Bay refinery objected to the winning bid in court this week, arguing the new company, which said it wants to restart the Caribbean facility, really wants to liquidate its assets.
Bankrupt Limetree Bay officially named St. Croix Energy LLLC the winning bidder on Wednesday in a $33 million purchase agreement, according to a filing in U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
However, backup bidder Bay Ltd, a Texas-based contractor, objected to the sale in a Wednesday court filing, saying it, along with New York-based Sabin Metal Corp made a superior tandem bid for $39 million. Bay asked the court to postpone a sale hearing scheduled for December 7, pending more legal discovery.
“The St. Croix bid smacks of nothing more than a disguised dismantlement bid, and in a head-to-head with Bay and Sabin, it falls far short,” Bay said in a court filing this week.
St. Croix Energy said it had won the auction in November. It has said it wants to restart the refinery, which was shut by U.S regulators earlier this year after a botched restart by private equity owners EIG and Arclight. Those companies poured more than $4 billion into the facility in efforts to revive Limetree, which had been shut for several years.
St. Croix Energy said it will buy the refinery for $20 million with approximately $13 million in assumed and avoided liabilities and other costs. The company, which has not revealed its leadership team, was designated the stalking horse bidder — the initial bid that acts as a price floor — last month.
St. Croix Energy did not respond to a request for comment.
Anyone that wishes to restart the refinery needs to comply with a U.S. Environmental Protection Agency (EPA) consent decree and may need additional permits to modify or expand certain parts of the refinery, according to an agency letter reviewed by Reuters.
Sabin bid $15.1 million on the refinery’s catalyst, a chemical substance used to refine crude oil into other products, contingent on Sabin’s ability to recover and sell metals from the catalyst.
Bay bid approximately $25 million on much of the rest of Limetree’s assets.
Bay also argued that St. Croix Energy prematurely announced itself as the winning bidder weeks before it was formerly designated on the docket, violating auction procedures.
The Virgin Islands Free Press has unconfirmed reports that St. Croix Energy’s principals are David Johnson of Cane Bay Partners VI, LLLP and Christiansted attorney Scot F. McChain of McChain Hamm and Associates LLP.
—REUTERS
Reporting by Laura Sanicola; Editing by David Gaffen and Aurora Ellis
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