Pawnbroker, massage clinic, Hooters, among SemGroup creditors

July 25, 2008

Massage clinics, McDonald’s restaurants, Hooters, funeral homes and a Canadian pawnbroker specializing in gold jewelry are among the hundreds of companies listed as creditors by failed U.S. energy trader SemGroup.
SemGroup filed for bankruptcy on July 22 after suffering $3.2 billion in losses on energy futures and derivatives trades.

If you’d like to have a look at some of their other creditors, check out this document.

(Note: this blog was updated on Jan 30, 2009 to point to corrected version of creditor document)

Comments

Saw the chronology you reported on the Semgroup fiasco. Why hasn’t anyone included in those time lines or their reporting the loans that Semgroup entities took out in June 2008? When SGLP disclosed that private equity lenders had seized control of its general partner, they noted that they did so pursuant to a loan to the GP dated June 25 2008 (I believe that was the date). That loan clearly contained terms that could result in a change of control of SGLP, which clearly could and did cause a default under SGLP’s credit agreement. How could SGLP and the Semgroup people possibly think it was OK not to disclose that highly material fact to the public investors in SGLP until after SGLP’s units had fallen over 50%? Moreover, if you look at SGLP’s June 2008 8Ks, SGLP awarded single-trigger units to its execs that vested upon a change of control of SGLP, which the June loan to the GP could be expected to trigger. These look like some kind of parachute or retention unit award; the nature of those awards wasn’t clear when they were disclosed, and that also looks fishy. At the very least, those units look like an unseemly grab by the execs on the way out the door. Once the plaintiffs attorneys put these facts together, and get a hold of Semgroup’s 2007 financials and the bad financial figures that weren’t disclosed in SGLP’s Feb 2008 offering, they will have a field day.

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