Limetree Bay seeks approval of settlement with terminal entities

By Sarah Lizee

Olympia, Wash., May 17 – Limetree Bay Refining, LLC is seeking court approval of a settlement with Limetree Bay Terminals Holdings, LLC, Limetree Bay Terminal Holdings II, LLC, Limetree Bay Cayman, Ltd., Limetree Bay Terminals, LLC and Limetree Bay Financing, LLC, according to a motion filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

After Limetree filed bankruptcy, a dispute arose between the debtors and terminal entities as to the amounts owed in connection with a terminal services agreement and shared services agreement.

The terminal entities notified the debtors of their informal objection to the Chapter 11 plan and disclosure statement, and the debtors granted an extension to file a formal objection while the parties attempted to resolve the terminal entities’ administrative claim and the terminal entities’ objection.

Limetree said the parties were able to reach an agreement to avoid the delay and expense of litigation associated with the dispute.

Under the settlement, the debtors will pay to the terminal entities $1.6 million in full and complete satisfaction of their prepetition claim and administrative claim. The payment will be made on the effective date of a Chapter 11 plan.

The parties will exchange mutual releases for any and all claims, with the exception of a rejection damages claim.

The terminal entities will support the Chapter 11 plan of liquidation and submit votes accepting the plan, but will not be bound or subject to any third-party releases in the plan.

“If approved by the court, the settlement will allow the Parties to avoid costly, time-consuming, and distracting litigation and, in so doing, remove a substantial obstacle to confirmation of the debtors’ plan of liquidation,” the company said in the motion.

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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