SemGroup supplier files lawsuit alleging lien on oil proceeds

By Jennifer Lanning Drey

Portland, Ore., July 31 - SemGroup, LP oil supplier LCS Production Co. asked the U.S. Bankruptcy Court for the District of Delaware to issue a determination stating that LCS holds a first and prior security interest lien on oil sold by LCS to SemGroup in June and July, as well as any proceeds from the sale of the oil, according to a Thursday filing.

In the filing, LCS claimed it had not been paid for oil sold to SemGroup in June and July and argued that the oil represents collateral. LCS believes proceeds from the sale of the oil are not property of the company's estate.

According to the filing, the total amount due to LCS for oil delivered in June is $3.39 million. The July total has not been finalized but is estimated at $1.76 million.

LCS also asked the court to enter a preliminary and permanent injunction enjoining SemGroup from using or disbursing any of the collateral, accounts receivable generated by a sale of the collateral, deposit funds or proceeds of any related accounts receivable.

Additionally, LCS also wants the court to require SemGroup to provide accounting information related to the status and sales of oil delivered by LCS in June and July, including the status of any related accounts receivable or cash.

SemGroup, a Tulsa, Okla., privately held limited partnership that provides midstream services to North America's energy industry, filed for bankruptcy on July 22. Its Chapter 11 case number is 08-11525.

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