Limetree Bay auction reopened due to ‘extraordinary circumstances’

By Sarah Lizee

Olympia, Wash., Dec. 13 – Limetree Bay Refining, LLC’s auction for its assets has been reopened, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

The auction will begin on Dec. 17.

As previously reported, the company had initially identified two potential going-concern bidders, St. Croix Energy, LLLP and West Indies Petroleum Ltd., and worked with the entities to qualify their bids prior to an auction.

However, Limetree was unable to designate West Indies Petroleum as a qualified bidder prior to the auction, mainly due to the failure to pay the requisite deposit, which ultimately left St. Croix Energy without a competing going-concern bid.

Limetree said that due to its severe liquidity issues, which necessitated an unusually expedited sale process, it proceeded with the auction and, ultimately, designated St. Croix Energy as the winning bidder.

The company said it has learned that West Indies Petroleum’s initial failure to pay the requisite deposit before the bid deadline resulted from a medical emergency that incapacitated West Indies Petroleum’s chief executive officer on the eve of the bid deadline, leaving it unable to formally qualify as a bidder or participate in the auction.

The CEO was the only person at West Indies Petroleum who had enough knowledge of the proposed refinery transaction and sale process and was the only person who could authorize a deposit or execute an asset purchase agreement, Limetree said.

“WIPL’s CEO is steadily recovering from his ordeal and, although he remains under doctors’ care, is now able to resume business responsibilities,” the company said.

West Indies Petroleum approached the debtors in the hopes of formally presenting its offer on terms more favorable than those under the St. Croix Energy bid.

Specifically, West Indies Petroleum’s proposed purchase price includes $30 million in cash at closing on Dec. 22, without the need for an extended transition period or prolonged designation period for certain going-concern assets.

As a sign of good faith, West Indies Petroleum has delivered a fully executed asset purchase agreement and paid a $3 million deposit.

“Due to the sudden and unforeseen medical emergency, which occurred just before the bid deadline, the initial failure of WIPL to provide a deposit and executed asset purchase agreement was clearly the result of extraordinary circumstances beyond the control of WIPL or the debtors and, at worst, excusable neglect,” the company said in its motion.

Limetree Bay is based in St. Croix, U.S. Virgin Islands, and is capable of processing around 200,000 barrels per day. The company filed bankruptcy on July 12 under Chapter 11 case number 21-32351.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.