A California bankruptcy court Monday approved a motion by rerefiner Evergreen Oil and parent Evergreen Environmental Holdings to establish procedures to sell their assets, as part of their recent Chapter 11 bankruptcy filings.
Evergreen Oil, along with parent and sole shareholder Evergreen Environmental Holdings, filed for Chapter 11 on April 9. A key factor cited was the cash flow impact from a March 2011 fire at its rerefinery in Newark, Calif.
In a court document, Evergreen said several parties had previously expressed interest in acquiring its assets, leading to discussions in 2011 and 2012. Extensive negotiations with three potential purchasers who made final bids took place as recently as July 2012, the company stated. Evergreen Oil and Evergreen Environmental Holdings were forced to file for bankruptcy before a suitable purchase and sale transaction could be finalized.
Under the sales procedures approved Monday, the companies retained investment banker will contact potential buyers and send out investor presentation materials to them through the end of April. Following final bids, an auction, and bankruptcy court approval, the procedures would call for the asset sale to close on or before July 8 this year.
Irvine, Calif.-based Evergreens Chapter 11 petition estimates assets in the $50 million to $100 million range, and liabilities also in the $50 million to $100 million range.
By deadline, Lube Report was unable to reach Evergreen Oil for comment.
The companys rerefinery in Newark, Calif., has 800 barrels per day of API Group II capacity. A fire on March 29, 2011, put the rerefinery plant out of commission until October 2011, when startup of its newest production train allowed it to restart with 50 percent capacity. In a court document, the company noted that as of Sept. 29, 2012, it had repaired the damage to its operating equipment in Newark and had continued operating normally since that time. The company further stated that it continues to suffer financially from the negative impact that the fire had on [Evergreen Oils] cash flow.
Evergreens filing indicates it would use the proceeds of the sale of Evergreen Environmental Holdings stock in Evergreen Oil to repay the latters creditors. Those holding the 20 largest unsecured claims include Petrochem Insulation ($494,217), Union Pacific Railroad ($405,190), Pacific Gas and Electric ($218,399), Red Giant Oil ($144,099), Robinson Oil ($137,619), Clean Harbors Catalyst Technologies ($107,590) and Clean Harbors Environmental Services ($82,419). Norwell, Mass.-based Clean Harbors last year acquired rerefiner Safety-Kleen.
Evergreen Oil was founded in 1984 to provide used oil collection for service stations. Its facilities are in Newark and Carson, Calif. In addition to collecting used motor oil for rerefining, Evergreen collects used oil filters for recycling, oily water for treatment and safe disposal, used antifreeze to send to offsite recyclers for re-use, and other hazardous and non-hazardous waste for sending offsite to authorized disposal sites.