South Philly refinery sale delayed, and will not be resolved this week
A reorganization plan that calls for a sale of the bankrupt PES refinery complex in South Philadelphia to Hilco Redevelopment Partners, which drew a chorus of objections, is "subject to continuing negotiations." A Feb. 6 hearing was continued.
A confirmation hearing for the Philadelphia Energy Solutions refinery bankruptcy, scheduled for Thursday before the U.S. Bankruptcy Court in Wilmington, has been continued until Feb. 12, according to a filing submitted on Tuesday.
Lawyers for PES notified the court that the amended reorganization plan, which calls for the sale of the refinery for $240 million to Hilco Redevelopment Partners, “remains subject to continuing negotiations and review” by PES and other parties. The company said it reserves the right to amend, modify or supplement the reorganization plan.
Nine parties submitted objections by a deadline Monday, and deadline was extended until Wednesday to allow the U.S. Attorney to submit its filing. State Sen. Larry Farnese, State Sen. Anthony Hardy Williams, and State Rep. Jordan Harris, all Philadelphia Democrats, also submitted letters to the court sharing their thoughts.
PES operated the largest oil refinery on the East Coast in South Philadelphia until it shut down June 21 following a devastating fire. It declared bankruptcy on July 21, its second bankruptcy in two years.
Two industrial redevelopers are competing to buy the refinery. Hilco has told city officials that it plans to repurpose the 1,300-acre facility to a mixed-use commercial and industrial facility. The backup bidder, Industrial Realty Group (IRG), has formed an alliance with a local company headed by former refinery chief executive Philip Rinaldi to run the property as a refinery.
The Official Committee of Unsecured Creditors has recommended that its members reject the plan because IRG bid $25 million more than Hilco for the property and wants to restart the refinery. The unsecured creditors include the refinery’s labor union and many suppliers, who say they would be better off if the refinery restarted.
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Sunoco Inc., which owned the refinery until 2012 and is financially responsible for remediating the contaminated property, also filed objections to efforts to bypass deed restrictions on the land that it says limit building to only refinery, chemical or energy industry uses.
PES, in its notice of the hearing continuation, said that if it revised the reorganization plan, it would post the proposed changes before the Feb. 12 hearing. It also asked U.S. Bankruptcy Court Judge Kevin Gross to reserve Feb. 13 as a backup date for the hearing.