Philadelphia Energy Files for Chapter 11



Philadelphia Energy Files for Chapter 11
Philadelphia Energy files for bankruptcy protection as the fuel-making company grapples with the aftermath of a June explosion and fire at its oil refinery.

(Bloomberg) -- Philadelphia Energy Solutions LLC filed for bankruptcy protection as the fuel-making company grapples with the aftermath of a June explosion and fire at its oil refinery that forced it to shut operations.

The company has submitted Chapter 11 petitions at the U.S. Bankruptcy Court for the District of Delaware, according to new filings at the court. It will be the company’s second trip to bankruptcy court in less than two years, after emerging from Chapter 11 in August 2018. Estimated liabilities are as high as $10 billion, according to the filings.

The East Coast’s largest oil refiner said in June that it was dismissing more than 1,000 workers and shutting its plant, which could process 335,000 barrels of crude oil a day. It had also been putting the finishing touches on $150 million of debtor-in-possession financing from owners and existing lenders, a person with knowledge of the matter said earlier this month. The loan would allow the company to shut down safely, after which it would pursue claims under its $1.25 billion of insurance coverage, the person said.

A unit of Dallas-based Trinity Industries Inc. holds the largest unsecured claim, of almost $4.1 million, the court filings show. CSX Transportation Inc. and BNSF Railway Co. are the next biggest, at $3.9 million and $3.5 million, respectively.

Last month, a leak at an alkylation unit, which is used to make high-octane gasoline, triggered explosions and fire that stopped the refinery’s Girard Point section. The Point Breeze section -- which had been running at a reduced rate -- was on track to run out of crude by Sunday night, Bloomberg reported July 19.

--With assistance from Niluksi Koswanage and Finbarr Flynn.

To contact the reporter on this story:
Stephen Stapczynski in Singapore at sstapczynsk1@bloomberg.net

To contact the editors responsible for this story:
Ramsey Al-Rikabi at ralrikabi@bloomberg.net
Alexander Kwiatkowski



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