SemGroup subsidiary reaches pact

By: From Wire Reports
By: From Wire Reports

TULSA, Okla. (AP) - A federal bankruptcy judge approved an agreement between a subsidiary of SemGroup LP, a group with ties to Sherman that filed for Chapter 11 Bankruptcy protection, and two other companies that will allow a 524-mile pipeline project to proceed.

As part of the pact signed off on by Delaware Bankruptcy Judge Brendan L. Shannon, SemCrude Pipeline will have to let another company oversee its work and allow access to records.

General Electric Capital -- part of the pact -- alleged last week that SemCrude defaulted on the terms of a $120 million loan to build the pipeline from Platteville, Colorado, to storage terminals in Cushing.

The creditor accused SemCrude of taking $54 million out of the loan fund and sending it to SemGroup instead of spending it on the project.

General Electric Capital wanted PE-Pipeline Services to be in charge of the effort, but was blocked because SemCrude allegedly wouldn't relinquish records and control of the project.

The three companies agreed today that SemCrude would continue work on the pipeline as long as terms of the agreement are kept.

SemGroup, which has a facility in Sherman, filed for Chapter 11 bankruptcy protection July 22nd.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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