Limetree Bay says committee, lender disputes over plan resolved

By Sarah Lizee

Olympia, Wash., April 4 – Limetree Bay Refining, LLC, its official committee of unsecured creditors and its prepetition secured lenders have resolved all material or monetary disputes with respect to a Chapter 11 plan, the company said in court documents filed Sunday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, David R. Jones directed the company to show cause for why its bankruptcy case shouldn’t be converted to Chapter 7 at a hearing scheduled for Tuesday. The disclosure statement hearing was also scheduled for Tuesday.

The company said its plan will be modified so that avoidance actions against post-petition vendors will not be preserved, and avoidance actions with potential exposure of less than $100,000 against vendors of the debtors will not be preserved.

It will also be modified to require the prepetition secured parties to either obtain final court approval of any super-priority administrative claims permitted under the final debtor-in-possession order prior to the effective date or waive and release any super-priority administrative claims against the estates and their assets, including available sale proceeds.

Limetree said the amended plan serves the best interests of the estates and its creditors because it preserves the principal assets of the estates, preserves the administration of the estates to date, including as much as possible of the $62 million sale of the debtors’ principal assets, and establishes a streamlined transition of the administration of the debtors’ assets to a liquidating trust.

The plan also ensures the feasibility of the proposed liquidation by providing up to $1.25 million in initial funding and carve-outs for administrative expenses of the liquidating trust, which amounts shall be funded by the cash collateral of the company’s revolving facility lenders.

Limetree said the committee has agreed to withdraw its previous motion seeking dismissal of the case.

The company also said it would file the revised plan before the hearing.

Limetree Bay is based in St. Croix, U.S. Virgin Islands, and is capable of processing around 200,000 barrels of oil per day. The company filed bankruptcy on July 12, 2021 under Chapter 11 case number 21-32351.

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