World Fuel Services Among Creditors Formally Objecting to Bomin's $5M Offer for Bunkers International

Several of Bunkers International's creditors have objected to the sale terms.

A $5 million cash purchase offer made by the Bomin Group's U.S. entity, Bomin Bunker Oil Corporation (BBOC), for bankrupt Florida-based Bunkers International Corp. (Bunkers International) has been met with formal opposition from several of Bunkers International's creditors, court documents obtained by Ship & Bunker show.

The main objection was filed on Tuesday, December 8, 2015, by The Official Committee of Unsecured Creditors of Bunkers International Corp. (the Committee), with separate filings on Wednesday December 9, 2015 showing World Fuel Services Corporation (World Fuel Services) and Sea Bunkering International B.V. were among those who had also joined the opposition action.

The 26 page document listed numerous complaints over Bomin's offer, including "serious concerns" with what it claims was an "inadequate" sale process, as well as the $5 million sale price that has been backed by Bunkers International.

"There has been no formal marketing process for the assets, no investment banker assisting the Debtors, no offering memorandum and no diligence room for interested parties," the Committee claims.

"The offer accepted from Bomin is several million dollars less than what the Debtors claimed the assets to be worth, and is the same amount that was rejected just one month ago as being inadequate.

"The Debtors have not even attempted to address why they are now prepared to proceed with the same $5 million offer they spurned just a few weeks ago."

Sole Beneficiary

The Committee has also objected to the fact that PNC Bank, N.A. (PNC) will be the sole beneficiary of the sale proceeds. 

"All other creditors stand to receive nothing from the sale of substantially all of the Debtors' assets," it claims.

"This is a plainly impermissible use of the bankruptcy process and the Court should not permit PNC to turn these Chapter 11 cases into a federal foreclosure where its interests are served, but those of all other creditor constituencies are ignored."

The objection text also goes as far as to question the extent of PNC's claim to the sale proceeds.

"No proceeds should be distributed to PNC until either the Committee's investigation of PNC's alleged liens and claims against PNC is completed ... or a challenge brought by the Committee to the validity, priority and/or extent of PNC's purported secured claims is overruled by final order of the Court," the Committee stated.

As Ship & Bunker previously reported, Bomin's offer was made on November 24, 2015 for the assets of Bunkers International along with its affiliated entities Atlantic Gulf Bunkering, LLC, and Dolphin Marine Fuels, LLC (collectively BIC).

An expedited motion to approve the sale of BIC has been granted by the Orlando, Florida bankruptcy court to be heard later today, December 10, 2015 at 3:00pm local time.

Should the sale to Bomin be approved, the Committee has asked that the sale proceeds be held in escrow pending a determination of how best for them to be distributed.

The Committee has also asked the court to direct Bunkers International to include it in all ongoing and future sale negotiations and efforts, alleging that they have been excluded from the sale negotiation process to date.

Bunkers International filed for bankruptcy in August with debts of around $40 million.

Los Angeles Storage

Separately, on December 8, 2015. Vopak Terminal Los Angeles, Inc. (Vopak) also filed its own objection to the sale.

In its claim, Vopak states that it has been providing storage services at its Los Angeles Terminal to BIC entity Dolphin Marine Fuels, as per a contract that was most recently revised on September 30, 2014.

As part of the sale offer, it is stated that Bomin intends to assume that contract, and that "there are no outstanding cure amounts associated with respect to the [storage contract]."

However Vopak says this is incorrect, and it is owed approximately $340,171 in lease payments for July through December, plus ancillary charges.

"Failure of the Debtor to make timely payment is a default under the contract," Vopak stated.

"Pursuant to 11 U.S.C. § 365(b), a debtor cannot assume or assume and assign an executory contract under which there has been a default, unless the debtor cures, or provides adequate assurance that it will promptly cure, such default."

"Consequently, Vopak objects to the Sale Motion and to the assumption and assignment of the Storage Agreement absent the cure of approximately $340,171 outstanding under the Storage Agreements."

Earlier this month Ship & Bunker reported that Bunkers International was backing Bomin's offer, saying it was "in the best interest of the estate" and it "provides the highest and best value for their assets."