News

SemGroup LP case turns into bankruptcy behemoth

published in The Journal Record | November 21, 2008

McAfee & Taft bankruptcy attorney Steven Bugg was interviewed for a Journal Record story about the enormity of the SemGroup LP bankruptcy case, “even by the standards of Delaware, corporate home to many top-shelf mega-companies.”

According to the article, “filings in the case have already topped 2,292, and that a major national law firm has at least 35 attorneys working on the case at any particular time.”

Bugg is quoted in the article saying roughly 80 percent of the production at issue in the case is in Oklahoma, Texas and Kansas. Six of nine members of a producers’ committee authorized by the bankruptcy court are from Oklahoma.

The article states Bugg explained that “Oklahoma Attorney General Drew Edmondson issued a recent opinion determining that Oklahoma law creates a trust in favor of producers as to their production, meaning that it should not be considered part of the bankruptcy estate.”

“It was an interesting and very favorable development,” said Bugg, who said it will be interesting to see how the opinion will be used in the bankruptcy case.

The article said other questions have to be answered involving legal issues, such as choice of law (which state’s to apply), who gets paid first and out of which pot of money and how SemGroup assets may fare in today’s squeezed financial markets.

“There’s a long way to go,” said Bugg, “and none of us can see what will happen at the end of the day.”