No Winning Bidder Yet in Hovensa Bankruptcy Auction

by San Antonio Attorney

An auction of Hovensa’s remaining assets ended last Monday night without a suitable bidder.

Meanwhile, negotiations with companies that were connected to Hovensa’s bankruptcy case were ongoing.

The auction bears conflict between interested companies Limetree Bay Holdings and Buckeye Partners.

The two companies both want to purchase the oil storage portion of Hovensa.

A rescheduling for the sale hearing will take place should the court be informed of a winning bidder and a proposed sale order.  The sale will also not be approved sans the judge’s approval.

The auction follows Section 363 of the bankruptcy code.  This is in effect after Hovensa filed for Chapter 11 bankruptcy last September.

Bearing the role of the “stalking horse,” Limetree Bay made the initial bid for $184 million cash to purchase the oil storage terminal portion of the Hovensa company.

Limetree Bay will also release another $6 million for two tugboats belonging to Hess Oil Virgin Islands Corporation.

Limetree’s offer complies with the feasibility of the investment, along with presenting it as a ‘good deal.’

Other potential buyers of the oil terminal portion have to come up with a better to gain entry to the auction.

Interested parties, in compliance for completing a bid for the oil terminal portion, should meet the criteria and submit a minimum bid of equal value as the stalking horse bid.

In total, an interested buyer should also pay a $4.7 million break-up fee and another $1.9 million for the expense reimbursement for the stalking horse bidder.

Buckeye finally submitted a $198.6 million bid that gained entry into the auction last November 5.

The private auction occurred in the offices of White & Case, LLP, which is an international law firm in New York.

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