Independent producers in Kansas, Oklahoma and Texas are claiming in a lawsuit that Goldman Sachs subsidiary J. Aron & Co. and BP plc subsidiary BP Oil Supply Co. conspired with SemGroup to defraud them and convert millions of dollars worth of their crude oil and gas that was delivered to SemGroup prior to the company’s 2008 bankruptcy.
In addition to BP and J. Aron, ConocoPhillips, Plains Marketing and numerous other oil and gas companies are named as defendants in lawsuits that were filed in Kansas and Oklahoma state courts, lawyers for the more than 80 producers said. The lawsuits claim that the producers are owed millions of dollars for the oil and gas that the defendants took from SemGroup just as margin calls were rapidly driving the energy company toward its Chapter 11 filing in July 2008.
“We believe the evidence will show that J. Aron deliberately took advantage of SemGroup’s dire financial predicament when J. Aron took possession of our clients’ oil and gas,” said bankruptcy attorney Peter Goodman of the firm McKool Smith, which is representing the represents the plaintiffs.
The producer complaints allege that Goldman Sachs and J. Aron exploited their multilayered relationship with SemGroup in which they were the company’s investment banker, offering agent, lender and trading partner to take possession of the independent producers’ oil and gas in violation of numerous state laws of Kansas, Oklahoma, and Texas.
Goldman Sachs spokesman Michael Duvally declined to comment on the suit, and BP did not immediately respond to a request for comment.
SemGroup filed for bankruptcy in July 2008 after announcing $3.2 billion in trading losses. SemGroup’s losses came in crude oil deals on the New York Mercantile Exchange and over-the-counter energy derivatives markets. The company said at the time of the bankruptcy that it planned to liquidate most of its assets (see Daily GPI, July 28, 2008; July 24, 2008).
Calgary-based Nexen Inc. recently agreed to sell its North American gas marketing business to J. Aron & Co. (see Daily GPI, May 14).
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