O.W. Bunker’s proposed sale of stored oil opposed by warehouse

By Kali Hays

New York, Dec. 2 – O.W. Bunker Holding North America Inc. secured creditor Vopak Terminal Los Angeles Inc. objected to the proposed sale of company oil stored at a Vopak’s terminal in Wilmington, Calif., according to a Monday filing with the U.S. Bankruptcy Court for the District of Connecticut.

As previously reported, O.W. Bunker has more than 27,000 metric tons of various grades of oil stored at the Vopak terminal, and smaller quantities are on a vessel or vessels in the Los Angeles area.

The court approved bid procedures related to the sale on Nov. 24.

Vopak’s objection to the sale rests on its claim that it has and continues to accrue unpaid storage costs for the oil, giving it a secured “warehouseman’s lien” on all product stored in the terminal and that the sale motion does not provide payment for these costs.

Moreover, O.W. Bunker’s sale motion asks that it be given the authority to “assume and assign” its storage agreement with Vopak and provides an incorrect cure amount for the agreement, according to the objection.

In light of these claims, Vopak asked that the court deny the sale motion or condition any sale approval upon the full payment of its secured claim, that the storage contract be rejected or O.W. Bunker be required to use any proceeds from the sale to pay Vopak’s storage fees and expenses as they become due.

An auction for the assets is set to take place Dec. 4, and a hearing to approve a winning bid is scheduled for Dec. 5.

O.W. Bunker is an independent distributor and reseller of marine fuel and is based in Denmark. Its U.S. subsidiaries filed bankruptcy on Nov. 13 under Chapter 11 case number 14-51720.

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