(Reuters) – Bankrupt Texas petrochemical producer TPC Group on Thursday announced a $30 million settlement with junior creditors, including people with injury and property damage claims related to a 2019 fire explosion and fire at a Port Neches, Texas, refinery.
The Houston-based firm filed a prepackaged Chapter 11 case in June after reaching an agreement with bondholders to eliminate $950 million of $1.3 billion in secured debt and shed liabilities from an explosion and fire at its plant in Port Neches, Texas. A bankruptcy plan based on that agreement would have left just $5 million for junior creditors and litigation claimants.
Thursday’s settlement increases junior creditors‘ recovery to $30 million and ensures that a higher percentage of those funds will go to litigation claimants. Bondholders, who will not be fully repaid in TPC’s restructuring, agreed not to collect any money from the $30 million fund.
TPC’s attorneys said during a court hearing in Wilmington, Delaware, that the company will amend its Chapter 11 plan to reflect the settlement and reach out to creditors eligible to vote on the restructuring proposal.
The company will seek confirmation of its revised bankruptcy plan at a Nov. 30 court hearing.
TPC produces the petrochemicals butane and butadiene, which are used in manufacturing of plastics, tires and gasoline. After the Port Neches refinery fire, TPC faced about 7,000 claims for property damage, business interruption and personal injury, as well as federal and state investigations, according to court filings.
The case is TPC Group Inc, U.S. Bankruptcy Court, District of Delaware, No. 22-10493.
For TPC: Jim Prince and Kevin Chiu of Baker Botts
For the unsecured creditors committee: Marty Brimmage of Akin Gump Strauss Hauer & Feld
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