Limetree Bay receives confirmation of Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., May 18 – Limetree Bay Refining, LLC received confirmation of its Chapter 11 plan of liquidation on Wednesday, according to a minute entry filed with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the plan ensures the feasibility of the proposed liquidation by providing up to $1.25 million in initial funding and carve-outs for administrative expenses of the liquidating trust, which amounts will be funded by the cash collateral of the company’s revolving facility lenders.

Holders of other priority claims will receive payment in full in cash.

Holders of prepetition revolver secured claims will receive their pro rata share of all available sale proceeds, and class A1, B1, B2, B3, C1 and C2 liquidating trust units.

Holders of prepetition term secured debt claims will receive their pro rata share of class A2, B2, B3 and C2 liquidating trust assets.

Holders of other secured claims will receive the collateral securing their claims or cash equal to the amount of their claims.

Holders of general unsecured claims will receive their pro rata share of the class B3 and C2 liquidating trust units.

Holders of governmental fine and penalty claims will receive their pro rata share of the class B4 and C3 liquidating trust units.

Holders of prepetition holdco secured debt claims will receive their pro rata share of class B5 and C4 liquidating trust units.

Equity interests and intercompany claims will be canceled with no distribution.

The liquidating trust agreement does allow for the possibility of raising more funds for the liquidating trust.

Wednesday’s minute entry said the company had also received 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.

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.

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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