U.S. and local officials are opposing the sale procedure for the bankrupt Philadelphia Energy Solutions oil refinery, arguing the plan discourages bidders and keeps the city locked out of the process, according to federal court filings.
The proposed PES sale plan does not give potential buyers of the fire-damaged refinery enough time or information to outbid a stalking-horse bid chosen by PES, U.S. Trustee Andrew Vara argued in a filing with the U.S. Bankruptcy Court in Delaware on Thursday, as reported by Reuters.
Companies often select what is known as a stalking horse to start an asset sale. Other parties then submit bids, which, if for more money or better for some other reason, would win out.
PES’s proposal sets a stalking-horse deadline one day before final bids are due, which “will create confusion, delay and may tend to discourage bidders” who might not know what they are attempting to outbid, said Vara, who is appointed to oversee the bankruptcy case.
The city of Philadelphia, which is a creditor in the bankruptcy case and a regulator of the refinery, also objected to the sale process in a filing with the court on Thursday.
It is asking PES to disclose the identities of qualified bidders and allow the city to attend the refinery auction, which it would be excluded from under the current plan, Philadelphia’s deputy city solicitor, Megan Harper, said in the objection.
PES was not immediately available for comment.
The refiner filed for bankruptcy on July 21 and closed the 335,000 barrel-per-day refinery a month after a fire and explosions at the plant.
Roughly a dozen parties have shown interest in buying the refinery, pitching various uses for the facility, which has been used to store and process fossil fuels for the last 150 years.
Any change to the use of the more than 1,300-acre PES site near downtown Philadelphia could require city-issued rezoning and additional cleanup of the deeply contaminated area, Harper said.
“Development and operation of the site by any one of the variety of market players expressing interest in the debtors’ assets will not occur in a vacuum,” the city’s filing said.
“Coordination with city, state and federal authorities will be necessary to revitalize the site, return it to its status as a significant contributor to the local and regional economy and ensure that public health, safety and wellbeing of city residents are protected,” it said.
The PES bankruptcy hearing is scheduled for Nov. 14 .
(Reporting by Laila Kearney Editing by Leslie Adler)
