IN THE UNITED STATES BANKRUPTCY COURT FOR THE …€¦ · Exhibit A. The Settlement Stipulation is...

DOCS_DE:229003.1 70753/001

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

)

In re: ) Chapter 11

)

PES HOLDINGS, LLC, et al.,1 ) Case No. 19-11626 (LSS)

)

Debtors. ) (Jointly Administered)

)

CERTIFICATION OF COUNSEL SUBMITTING ORDER APPROVING STIPULATION

OF SETTLEMENT BETWEEN PHILADELPHIA ENERGY SOLUTIONS REFINING

AND MARKETING LLC AND NGL ENERGY PARTNERS, LP REGARDING

DISPUTES RELATED TO ITS OTHER SECURED CLAIM

The undersigned counsel hereby certifies that:

1. The above-captioned debtors (collectively, the “Debtors”) operated a refining

complex on an approximately 1,300 acre site near downtown Philadelphia.

2. In April 2014, Debtor Philadelphia Energy Solutions Refining and Marketing

LLC (“PESRM”) entered into an Engineering, Design, Procurement and Construction

Management Agreement (the “EPCM”) to construct a butane rack loading and unloading facility

at the Girard Point South Yard, as more particularly described on Exhibit A to the Installment

Agreement (as defined below) (the “Facility”) at the refining complex.

3. On May 7, 2014, PESRM entered into a series of agreements with NGL related to

the Facility, including (i) an Installment Sale and Purchase Agreement (the “Installment

Agreement”), under which PESRM agreed to purchase the Facility from NGL via monthly

installment payments; (ii) the Temporary Access License Agreement; and (iii) the Management

Services Agreement (together, the “NGL Agreements”).

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification

number, are: PES Holdings, LLC (8157); North Yard GP, LLC (5458); North Yard Logistics, L.P. (5952); PES

Administrative Services, LLC (3022); PES Energy Inc. (0661); PES Intermediate, LLC (0074); PES Ultimate

Holdings, LLC (6061); and Philadelphia Energy Solutions Refining and Marketing LLC (9574). The Debtors’

service address is: 1735 Market Street, Philadelphia, Pennsylvania 19103.

Case 19-11626-LSS Doc 1312 Filed 06/08/20 of 4

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4. On July 21, 2019 (the “Petition Date”), each of the Debtors filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) in the

United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) shortly

after an explosion left Debtors unable to continue operating the refining complex.

5. On October 21, 2019, NGL filed Proof of Claim No. 304 in the Chapter 11 Cases

for $26,707,060.91 related to amounts outstanding under the Installment Agreement (the “NGL

Claim”), which NGL claimed was secured by, among other things, a butane rack and certain

railroad track (all collateral securing NGL’s payments under the NGL Agreements is collectively

referred to hereafter as the “Collateral”).

6. On February 13, 2020, the Bankruptcy Court entered an order (the “Confirmation

Order”) confirming the Confirmed Plan [Dkt. 1004].

7. The Confirmed Plan included a class for Other Secured Claims, which included

“any Secured Claim other than the Term Loan Secured Claims and Intermediation Secured

Claims,” including the NGL Claim. [Dkt. 1004-1 at 9, ¶ 116]

8. The Debtors’ Confirmed Plan provided for the following possible treatments for

“Class 1 - Other Secured Claims”:

Each Holder of an Allowed Other Secured Claim will receive, at the Debtors’

election (subject to the reasonable consent of the Required Term Loan Lenders):

(a) payment in full in Cash, which may come from the Other Secured Claims

Reserve; (b) delivery of the collateral securing any such Claim and payment of

any interest required under section 506(b) of the Bankruptcy Code; (c)

Reinstatement of such Claim; or (d) other treatment rendering such Claim

Unimpaired. [Dkt. 1004-1 at 20-21]

9. Debtors’ Confirmed Plan also provided for an “NGL Installment Sale Agreement

Deficiency Claim” which it defined as “any NGL Installment Sale Agreement Claim that is not a

Secured Claim.” [Dkt. 1004-1 at 9, ¶ 111]


3 DOCS_DE:229003.1 70753/001

10. The Debtors’ Confirmed Plan defines “General Unsecured Claim” as including

“NGL Installment Sale Agreement Deficiency Claims.” [Id. at 6, ¶ 71]

11. The Debtors and NGL had a series of disputes, including one argued to the Court

on May 14, 2020. Following the Court hearing on May 14, 2020, the Debtors and NGL

continued to discuss the matters in dispute in an effort to reach a mutually-agreeable settlement.

12. The Debtors and NGL have settled all disputes related to the NGL Claim, the

Facility, and the Collateral, and wish to resolve their respective rights and obligations with

respect to the NGL Claim, in its entirety, on the terms set forth in the attached settlement

stipulation (the “Settlement Stipulation”).

13. A proposed order approving the Settlement Stipulation is attached hereto as

Exhibit A. The Settlement Stipulation is attached to the proposed order as Exhibit 1.

14. The Debtors respectfully request entry of the proposed order attached hereto as

Exhibit A at the Court’s earliest convenience.

Dated: June 8, 2020 /s/ Peter J. Keane

Wilmington, Delaware Laura Davis Jones (DE Bar No. 2436)

James E. O’Neill (DE Bar No. 4042)

Peter J. Keane (DE Bar No. 5503)

PACHULSKI STANG ZIEHL & JONES LLP

919 North Market Street, 17th Floor

P.O. Box 8705

Wilmington, Delaware 19899-8705 (Courier 19801)

Telephone: (302) 652-4100

Facsimile: (302) 652-4400

Email: [email protected]

[email protected]

[email protected]


4 DOCS_DE:229003.1 70753/001

- and -

Edward O. Sassower, P.C.

Steven N. Serajeddini, P.C. (admitted pro hac vice)

Matthew C. Fagen (admitted pro hac vice)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

601 Lexington Avenue

New York, New York 10022

Telephone: (212) 446-4800

Facsimile: (212) 446-4900


[email protected]

[email protected]

Michael B. Slade (admitted pro hac vice)

Whitney L. Becker (admitted pro hac vice)


KIRKLAND & ELLIS INTERNATIONAL LLP

300 N. LaSalle

Chicago, IL 60654

Telephone: (312) 862-2000

Fascimile: (312) 862-2200


[email protected]

Co-Counsel to the Debtors and Debtors in Possession


DOCS_DE:229003.1 70753/001

Exhibit A

Proposed Order

Case 19-11626-LSS Doc 1312-1 Filed 06/08/20 Page 1 of 9

2 DOCS_DE:229003.1 70753/001



)

In re: ) Chapter 11

)

PES HOLDINGS, LLC, et al.,1 ) Case No. 19-11626 (LSS)

)

Debtors. ) (Jointly Administered)

)

ORDER APPROVING STIPULATION OF SETTLEMENT BETWEEN

PHILADELPHIA ENERGY SOLUTIONS REFINING AND MARKETING LLC AND

NGL ENERGY PARTNERS, LP REGARDING DISPUTES RELATED TO ITS OTHER

SECURED CLAIM

Upon the Certification of Counsel Submitting Order Approving Stipulation of Settlement

Between Philadelphia Energy Solutions Refining and Marketing LLC and NGL Energy Partners,

LP Regarding Disputes Related to Its Other Secured Claim (the “Certification of Counsel”) and

the Stipulation of Settlement Between Philadelphia Energy Solutions Refining and Marketing

LLC and NGL Energy Partners, LP Regarding Disputes Related to Its Other Secured Claim

(the “Settlement Stipulation”),2 attached hereto as Exhibit 1, by and among the above-captioned

debtors (the “Debtors”) and NGL Energy Partners, LP (“NGL”, together with the Debtors, the

“Parties”); and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and the Amended Standing Order of Reference from the United States District Court for the

District of Delaware, dated February 29, 2012; and this Court having found that venue of this

proceeding and the Settlement Stipulation in this district is proper pursuant to 28 U.S.C. §§ 1408

and 1409; and this Court having reviewed the Settlement Stipulation; and after due deliberation




Holdings, LLC (6061); and Philadelphia Energy Solutions Refining and Marketing LLC (9574). The Debtors’

service address is: 1735 Market Street, Philadelphia, Pennsylvania 19103.


3 DOCS_DE:229003.1 70753/001

and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:

1. The Settlement Stipulation is approved.

2. The Parties are authorized to take all actions necessary to effectuate the relief

granted in this Order and to consummate the Settlement Stipulation.

2 Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Settlement

Stipulation.


DOCS_DE:229003.1 70753/001

Exhibit 1

Settlement Stipulation


DOCS_DE:229010.1 70753/001



---------------------------------------------------------------

In re:

PES HOLDINGS, LLC, ET AL.,

Debtors.1

--------------------------------------------------------------

x

:

:

:

:

:

:

;

x

Chapter 11

Case No. 19-11626 (LSS)

Jointly Administered

STIPULATION OF SETTLEMENT BETWEEN PHILADELPHIA ENERGY

SOLUTIONS REFINING AND MARKETING LLC AND NGL ENERGY PARTNERS,

LP REGARDING DISPUTES RELATED TO ITS OTHER SECURED CLAIM

This stipulation of settlement (the “Settlement Stipulation”) is made and entered into by

and among the above-captioned debtors (the “Debtors”) and NGL Energy Partners, LP (“NGL”,

together with the Debtors, the “Parties”) related to the Debtors’ satisfaction of NGL’s Other

Secured Claim, as defined pursuant to the Debtors Fourth Amended Joint Chapter 11 Plan of

PES Holdings LLC and Its Debtors Affiliates (the “Confirmed Plan”). [Dkt. 1004-1]

RECITALS

WHEREAS, Debtors operated a refining complex on an approximately 1,300 acre site

near downtown Philadelphia.

WHEREAS, in April 2014, PESRM entered into an Engineering, Design, Procurement

and Construction Management Agreement (the “EPCM”) to construct a butane rack loading and

unloading facility at the Girard Point South Yard, as more particularly described on Exhibit A to

the Installment Agreement (as defined below) (the “Facility”) at the refining complex.




Holdings, LLC (6061); and Philadelphia Energy Solutions Refining and Marketing LLC (“PESRM”) (9574).

The Debtors’ service address is: 1735 Market Street, Philadelphia, Pennsylvania 19103.


2 DOCS_DE:229010.1 70753/001

WHEREAS, on May 7, 2014, PESRM entered into a series of agreements with NGL

related to the Facility, including (i) an Installment Sale and Purchase Agreement (the

“Installment Agreement”), under which PESRM agreed to purchase the Facility from NGL via

monthly installment payments; (ii) the Temporary Access License Agreement; and (iii) the

Management Services Agreement (together, the “NGL Agreements”).

WHEREAS, on July 21, 2019 (the “Petition Date”), each of the Debtors filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) in the

United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) shortly

after an explosion left Debtors unable to continue operating the refining complex.

WHEREAS, on October 21, 2019, NGL filed Proof of Claim No. 304 in the Chapter 11

Cases for $26,707,060.91 related to amounts outstanding under the Installment Agreement (the

“NGL Claim”), which NGL claimed was secured by, among other things, a butane rack and

certain railroad track (all collateral securing NGL’s payments under the NGL Agreements is

collectively referred to hereafter as the “Collateral”).

WHEREAS, on February 13, 2020, the Bankruptcy Court entered an order (the

“Confirmation Order”) confirming the Confirmed Plan [Dkt. 1004].

WHEREAS, the Confirmed Plan included a class for Other Secured Claims, which

included “any Secured Claim other than the Term Loan Secured Claims and Intermediation

Secured Claims,” including the NGL Claim. [Dkt. 1004-1 at 9, ¶ 116]

WHEREAS, the Debtors’ Confirmed Plan provided for the following possible treatments

for “Class 1 - Other Secured Claims”:

Each Holder of an Allowed Other Secured Claim will receive, at the Debtors’

election (subject to the reasonable consent of the Required Term Loan Lenders):

(a) payment in full in Cash, which may come from the Other Secured Claims

Reserve; (b) delivery of the collateral securing any such Claim and payment of


3 DOCS_DE:229010.1 70753/001

any interest required under section 506(b) of the Bankruptcy Code; (c)

Reinstatement of such Claim; or (d) other treatment rendering such Claim

Unimpaired. [Dkt. 1004-1 at 20-21]

WHEREAS, Debtors’ Confirmed Plan also provided for an “NGL Installment Sale

Agreement Deficiency Claim” which it defined as “any NGL Installment Sale Agreement Claim

that is not a Secured Claim.” [Dkt. 1004-1 at 9, ¶ 111]

WHEREAS, the Debtors’ Confirmed Plan defines “General Unsecured Claim” as

including “NGL Installment Sale Agreement Deficiency Claims.” [Id. at 6, ¶ 71]

WHEREAS, the Debtors and NGL have settled all disputes related to the NGL Claim, the

Facility, and the Collateral, and wish to resolve their respective rights and obligations with

respect to the NGL Claim, in its entirety, on the terms set forth in this Settlement Stipulation.

NOW THEREFORE, THE PARTIES HEREBY STIPULATE AND AGREE, AND

UPON THE BANKRUPTCY COURT’S APPROVAL, IT SHALL BE ORDERED AND

BINDING ON ALL PARTIES IN INTEREST AS FOLLOWS:

1. NGL’s Other Secured Claim shall be Allowed (as defined in the Confirmed Plan)

in the amount of $16.25 million ($16,250,000). On the Effective Date (as defined in the

Confirmed Plan, and hereinafter, the “Effective Date”) of the Confirmed Plan, Debtors shall pay

or cause to be paid to NGL $16.25 million ($16,250,000) (the “Payment”) in full satisfaction of

NGL’s Allowed Other Secured Claim, as defined under the Confirmed Plan.

2. In consideration for the Payment, for the avoidance of doubt, effective upon the

Effective Date of the Confirmed Plan and receipt of the Payment by NGL (i) PESRM shall be

the owner of the Facility and the Collateral, (ii) NGL hereby releases any and all rights, claims

and/or liens with respect to the Facility and the Collateral, and hereby transfers title to the

Facility and the Collateral free and clear of all liens, claims, and encumbrances to PESRM; and

(iii) the NGL Agreements are hereby terminated, the Debtors, the Liquidating Trust, and the


4 DOCS_DE:229010.1 70753/001

Buyer (as defined in the Confirmed Plan and the Confirmation Order) shall have no further

obligations or liabilities to NGL, except as provided in Paragraph 4 below. Each of the parties

will provide such further documentation as is reasonably requested by the other to effect the

foregoing, including the execution by NGL of a bill of sale or other transfer document as

reasonably requested by PESRM. Effective upon termination of the NGL Agreements, except as

provided in Paragraph 4 below, NGL shall have no further rights, obligations or liabilities

thereunder.

3. The Parties’ execution of the Settlement Stipulation and Debtors’ agreement to

pay or cause to be paid $16.25 million to NGL on the Effective Date satisfies any and all

obligations the Debtors may have under the Confirmed Plan and/or Confirmation Order with

respect to NGL’s Other Secured Claim.

4. NGL retains any and all rights to assert and prosecute a general unsecured claim,

referred to in the Confirmed Plan as a NGL Installment Sale Agreement Deficiency Claim. If

allowed, this general unsecured claim shall be treated as a Class 5 General Unsecured Claim

under the Confirmed Plan and Confirmation Order. The Debtors shall not file an objection to

NGL’s Installment Sale Agreement Deficiency Claim, provided that NGL’s Installment Sale

Agreement Deficiency Claim is only filed as a general unsecured claim (and does not seek

administrative or other priority or secured status) and does not exceed $10,457,060.91. All other

parties’ rights with respect to NGL’s assertion of an NGL Installment Sale Agreement

Deficiency Claim are reserved.

5. The Bankruptcy Court shall retain exclusive jurisdiction with respect to all

matters arising from or related to the implementation or interpretation of this Settlement

Stipulation.


5 DOCS_DE:229010.1 70753/001

Dated: June 8, 2020

GREENBERG TRAURIG, LLP

/s/ Dennis A. Meloro

Dennis A. Meloro (DE Bar No. 4435)

The Nemours Building

1007 North Orange Street, Suite 1200

Wilmington, Delaware 19801

(302) 661-7000

-and-

Hal S. Shaftel

MetLife Building

200 Park Avenue

New York, NY 10166

(212) 801-9200

Counsel for NGL Energy Partners, LP

PACHULSKI STANG ZIEHL & JONES LLP

/s/ Peter J. Keane

Laura Davis Jones (DE Bar No. 2436)

James E. O’Neill (DE Bar No. 4042)

Peter J. Keane (DE Bar No. 5503)

919 North Market Street, 17th Floor

P.O. Box 8705

Wilmington, Delware 19899-8705

Telephone: (302) 652-4100

Fascimile: (302) 652-4400

[email protected]

[email protected]

[email protected]

- and -


KIRKLAND & ELLIS INTERNATIONAL

LLP

Edward O. Sassower, P.C.

Steven N. Serajeddini (admitted pro hac vice)

Matthew C. Fagen (admitted pro hac vice)

601 Lexington Avenue

New York, NY 10022

Tel: (212) 446-4800

Michael B. Slade (admitted pro hac vice)

Whitney L. Becker (admitted pro hac vice)

300 N. LaSalle

Chicago, IL 60654

Tel: (312) 862-2000

[email protected]

[email protected]

Counsel to the Debtors


mailto:[email protected]





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