Judge ends SemGroup lawsuit [Tulsa World, Okla.]
<p><chron>Oct. 08</chron>-- The federal judge in <location value="LS/us.de" idsrc="xmltag.org">Delaware</location> presiding over <org>SemGroup LP's</org> bankruptcy ruled Friday that local <location value="LU/us.ok.tulsa" idsrc="xmltag.org">Tulsa</location> investors cannot continue their own state lawsuit against company co-founder <person>Tom Kivisto</person>, other executives and the PricewaterhouseCoopers accounting firm.</p><p>U.S. District Judge <person>Brendan L. Shannon's</person> order reverses a <location value="LU/us.ok.tulsa" idsrc="xmltag.org">Tulsa</location> federal judge's ruling less than two months ago to move the lawsuit back to <location value="LS/us.ok" idsrc="xmltag.org">Oklahoma</location> jurisdiction. If upheld or not appealed, the move ends all SemGroup-related litigation against Kivisto and his former colleagues.</p><p>"That was the last remaining lawsuit pending against any of the officers or directors of the company," Kivisto attorney <person>John Tucker</person> said. "They are prohibited from taking action in <location value="LS/us.ok" idsrc="xmltag.org">Oklahoma</location> and elsewhere to bring these claims."</p><p><org>The Cottonwood Partnership</org>, Rosene family, <person>Warren Kruger</person> and other SemGroup investors sued the executives and accounting firm last year. They alleged that defendants misled them about the privately held energy company's financial health, including <money>$300 million</money> in losses tied to Kivisto's own private trading in oil futures.</p><p>"Not only did PwC fail to alert plaintiffs and others about those problems, Kivisto made numerous representations to plaintiffs designed to conceal the nature of his misconduct," the <chron>December 2010</chron> complaint stated.</p><p>SemGroup ultimately lost up to <money>$3 billion</money> in margin calls on the failed "short" trading strategy, according to reports. The company was forced to seek Chapter 11 protection in <chron>July 2008</chron> after <org value="NYSE:BAC" idsrc="xmltag.org">Bank of America</org> withdrew <org value="NYSE:SEMG" idsrc="xmltag.org">SemGroup's</org> line of credit.</p><p>Kivisto, PricewaterhouseCoopers and other defendants alleged that the local investors' claims were identical to complaints in the <org>SemGroup Litigation Trust</org> of the bankruptcy case. Therefore, they argued, the case did not belong in state court.</p><p>"These folks are making the same claims that the litigation trust made in <location value="LS/us.de" idsrc="xmltag.org">Delaware</location>," Tucker said. "Those claims were settled and released."</p><p>The company settled its bankruptcy lawsuit for a reported <money>$30 million</money>. The money was paid from an executive insurance policy.</p><p>Another lawsuit, a class-action petition brought by investors in the former SemGroup public entity, now called <org value="NASDAQ-NMS:BKEP" idsrc="xmltag.org">BlueKnight Energy Partners LP</org>, was finalized in a <money>$28 million</money> cash-and-stock settlement in <location value="LU/us.ok.tulsa" idsrc="xmltag.org">Tulsa</location> federal court earlier this week. Other defendants in that case included <org value="NYSE:BAC" idsrc="xmltag.org">Bank of America</org>, and investors Carlyle/<org value="Singapore:AP4" idsrc="xmltag.org">Riverstone</org> and Ritchie Opportunistic Trading.</p><p>The Cottonwood lawsuit was originally filed in state court and later remanded to federal jurisdiction. U.S. District Judge <person>James Payne</person> of <location value="LU/us.ok.tulsa" idsrc="xmltag.org">Tulsa</location>, however, ruled in favor of the plaintiffs, who wanted it back in state court.</p><p>Plaintiffs' attorney <person>Jim Rusher</person> said his side is considering its next move.</p><p>"We didn't want it to be in bankruptcy court," Rusher said. "We feel it's <location value="LS/us.ok" idsrc="xmltag.org">Oklahoma</location> investors dealing with an <location value="LS/us.ok" idsrc="xmltag.org">Oklahoma</location> entity."</p><p><org>SemGroup LP</org>, under new leadership, emerged from bankruptcy reorganization as <org value="NYSE:SEMG" idsrc="xmltag.org">SemGroup Corp.</org> in <chron>December 2009</chron>. The company is publicly traded on the <org>New York Stock Exchange</org>.</p><p class="shirttail">___</p><p class="shirttail">(c)2011 Tulsa World (Tulsa, Okla.)</p><p class="shirttail">Visit Tulsa World (Tulsa, Okla.) at www.tulsaworld.com</p><p class="shirttail">Distributed by MCT Information Services</p>
Judge tosses Tulsa investors’ lawsuit against SemGroup [Tulsa World, Okla.]
Firefighters share recipes, stories on impact of cancer [Tulsa World, Okla.]
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News