Aegean Marine Petroleum Network Inc (fka ANWWQ)

[SC777]

Aegean Marine Advances Bankruptcy Plan to Creditor Vote

5:02 PM ET 2/14/19 | Dow Jones


By Tom Corrigan

A bankruptcy judge approved the blueprint of a plan the allows Switzerland's Mercuria Energy Group Ltd. to take control of troubled fuel supplier Aegean Marine Petroleum Network Inc.

During a court hearing Thursday in New York, where Aegean Marine sought chapter 11 protection in November, Judge Michael Wiles said he would sign off on the so-called disclosure statement, which will now be sent out to the company's creditors for a vote.

The disclosure statement, a 150-page document, describes how creditors can expect to be repaid and details other essential terms of Aegean Marine's $855 million debt-restructuring plan. Benjamin Winger, a lawyer for Aegean Marine, said he hopes to return to Judge Wiles's courtroom March 26 for a final hearing on the plan. If approved, the company says it would move to emerge from chapter 11 protection as soon as April 1.

The disclosure statement drew two objections, one from the Justice Department and the other from shareholders who are suing the company over allegedly misleading filings with the U.S. Securities and Exchange Commission and suspected phony accounts receivable.

Aegean Marine filed for bankruptcy amid an accounting scandal, and an investigation continues into accounting troubles that left a $300 million hole in the company's books.

Both objections focused largely on the liability releases written into the plan, which are often used in chapter 11 cases to ensure newly reorganized companies get a fresh start, and how creditors would consent to those terms. Lawyers for the U.S. Trustee Program, the arm of the Justice Department that polices bankruptcies, said the releases were unjustifiably broad and criticized language requiring creditors to specifically opt out of accepting the release terms.

Shareholders suing Aegean Marine similarly called the releases "sweeping and virtually incomprehensible" and expressed concern the provisions could scuttle their litigation.

Aegean Marine has defended the releases, saying they are sufficiently tailored to allow for both the proposed debt restructuring as well as litigation focused on alleged wrongdoing against the company. By Thursday morning, lawyers for the company had managed to resolve many of the complaints regarding the disclosure statement.

"We're pleased to report we've made good progress," Mr. Winger told Judge Wiles. "It's all hugs and handshakes today."

Judge Wiles said he found the language describing the liability releases "more than a bit difficult to parse," and asked for several limitations and clarifications to be added to the disclosure statement before approving it.

In December, Mercuria won a competition with Oaktree Capital Management to take control of Aegean Marine, cutting a deal with the company and leading creditors that will give it the fuel supplier, in exchange for cash and an agreement to assume many of the operation's liabilities.

A key negotiating point in the battle for control of the company was the right of creditors to sue over alleged accounting fraud and misappropriation of significant Aegean Marine assets. Mercuria now says it will sign over to junior creditors all rights to collect damages.

Aegean Marine, which has its headquarters in Athens, began in 1995 as a single bunkering station in Greece, court papers say. Today its 850 employees operate a fleet of more than 50 vessels and a broad network of supply hubs, delivering fuel to customers in more than 20 countries and more than 50 ports.

Write to Tom Corrigan at [e-mail]

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February 14, 2019 17:02 ET (22:02 GMT)

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