OW Bankruptcy Could Have Been Avoided, Says New Report

A report from Søren Halling-Overgaard, a trustee for the OW Bunker bankruptcy, says actionable knowledge was withheld by company executives and private equity firm Altor.

A newly released 400-page report, prepared by Søren Halling-Overgaard, a trustee in OW Bunker's bankruptcy proceedings, concludes that the now defunct company's management, along with its previous private equity firm owners Altor, held actionable knowledge that could have enabled OW Bunker to avoid bankruptcy, Danish media reports.

The report is said to have determined that pertinent information regarding OW Bunker's oil speculation activities, on which it was said the business was largely based, should have been known by management but was not disclosed to potential investors, share holders, or the stock exchange leading up to and following the company's initial public offering (IPO) in March 2014.

OW Bunker's management and Altor should therefore be liable for the losses of the company's investors stemming from the company's collapse, Halling-Overgaard concludes.

The report, commissioned by the bankruptcy liquidator, was said to be the first time that such a comprehensive review of OW Bunker's internal management and communication processes has been performed.

In preparing the report, Halling-Overgaard is said to have had full access to OW Bunker's internal material, such as emails and memos, that preliminary investigations did not benefit from.

As Ship & Bunker reported in June, a group of 27 Danish investors have sued OW Bunker for DKK800 million ($120 million), saying the bunker supplier was misrepresented in its IPO prospectus.

3,500 shareholders are said to have bought shares in OW Bunker amid the alleged IPO misrepresentation.

OW Bunker filed for bankruptcy in November 2014, citing a $125 million "risk management" related loss as well as a $125 million fraud at its Singapore based Dynamic Oil Trading (DOT) subsidiary.

The firm had a hugely successful $1 billion IPO on the Nasdaq OMX Copenhagen less than 8 months earlier. 

The report released by OW Bunker's trustees is said to show that Altor earned DKK 4.2 billion ($615 million) from the IPO.

In March, Ship & Bunker reported that the Maritime and Port Authority of Singapore (MPA) rejected allegations leveled by Iceberg Research (Iceberg) that it had the opportunity to avert the collapse of OW Bunker.