The Philadelphia Energy Solutions oil refinery site will be sold for $252 million and redeveloped under a plan approved yesterday in bankruptcy court, ending months of uncertainty over whether the idled plant would be restarted, court filings show, Reuters reported. Judge Kevin Gross signed off on the PES bankruptcy agreement, filed with the United States Bankruptcy Court for the District of Delaware, a day after indicating at a public hearing that he was likely to do so. Hilco Redevelopment Partners, which becomes the new owner of the roughly 1,300-acre (526-hectare) PES refinery site as part of the plan, is expected to build warehouses and other commercial projects on the land. While Judge Gross approved the purchase and sale agreement, PES and Hilco have not yet closed on the deal. PES shut its 335,000-barrel-per-day refinery in South Philadelphia, the largest and oldest on the East Coast, and filed for chapter 11 protection after a fire destroyed a section of the plant over the summer. Read more.
In related news, Philadelphia Energy Solutions secured approval of a debt repayment plan, but action continues in bankruptcy court as the refiner tries to collect on $1.2 billion in insurance it said was triggered by the explosion that drove it into chapter 11, WSJ Pro Bankruptcy reported. In a lawsuit filed on Wednesday targeting a group of insurance carriers, Philadelphia Energy said its insurance companies’ attitude has been so “miserly” that they suggested that the oil refiner made money as a result of a June explosion that destroyed much of the facility. The incident put the Philadelphia refinery out of business, leading the company to file for chapter 11 with its future uncertain. Philadelphia Energy said it has $1.2 billion in coverage for property damage and business interruption losses but has received only $65 million. The company said that it has made clear to the insurers that its losses approach and will likely exceed the $1.2 billion in protection it paid for. Read more.