PES picked buyer for shuttered refinery but objection from creditors leave deal in doubt

Pat Loeb
January 25, 2020 - 4:00 am
Philadelphia Energy Solutions

Mike DeNardo/KYW Newsradio, file

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PHILADELPHIA (KYW Newsradio) — Seven months after the explosion and fire that shut down the Philadelphia Energy Solutions refinery, the future of the facility is still very unclear despite several significant events this week. 

On Wednesday, PES announced that the winning bid for the refinery site was the $240 million offer from HRC Philadelphia, a subsidiary of the Chicago-based real estate developer Hilco. 

The city's Managing Director Brian Abernathy said the company indicated it would pursue a safer, more environmentally-friendly re-use.

"When you look at the refinery advisory group report, Hilco checked a lot of the boxes," he said.

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But the next day, a group of creditors — including the refinery's union — announced they'd vote against the plan, in part, for the very reason that it does not create an opportunity for refining. 

"We want the refinery to come back as a refinery or a fuel production facility and there's a possibility of that with the other bid," said Ryan O'Callaghan, head of the steelworkers local.

The other bid was from the Industrial Realty Group, which actually bid $25 million more than HRC, another reason the creditors — who have $1.2 billion in claims against PES — object to the sale. 

The proposal goes before bankruptcy Judge Kevin Gross on Feb. 6.