Limetree Bay committee will seek to dismiss case if plan is filed

By Sarah Lizee

Olympia, Wash., March 16 – Limetree Bay Refining, LLC’s motion seeking another extension of its exclusive periods to file and solicit votes on a Chapter 11 plan drew an objection from the official committee of unsecured creditors, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company asked the court to extend the plan filing period through May 25 and the solicitation period through July 25.

“It has been some time since the sale of the debtors’ refinery closed on Jan. 21, and the DIP financing was paid in full. There is nothing of any benefit to be gained by prolonging the debtors’ stay in bankruptcy to pursue a plan process,” the committee said in its objection.

The committee said the net remaining proceeds should be distributed to the prepetition secured parties, and the case should be dismissed.

“It is anticipated that trade creditors will bear the brunt (through avoidance actions asserted against them) of subsidizing any plan, including for the likely diminution claims that will be asserted by the prepetition secured parties,” the committee said.

The committee said it has advised the debtors and prepetition secured parties that it intends to seek to dismiss the cases if a plan is filed.

Limetree Bay is based in St. Croix, U.S. Virgin Islands, and is capable of processing around 200,000 barrels of oil per day. The company filed bankruptcy on July 12, 2021 under Chapter 11 case number 21-32351.

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