Closed oil refinery files for bankruptcy after DOJ complaint
A closed oil refinery in the U.S. Virgin Islands filed for bankruptcy on Monday evening, the same week, the same week the Department of Justice announced civil action against the facility, The Washington Post reported.
The Limetree Bay refinery, which has been inactive for several years, resumed operations in February due to several measures taken by the outgoing Trump administration to ease the path to reopening.
Later that year, the Environmental Protection Agency ordered its closure, citing reports of major environmental and human risks to local residential areas. In June, the establishment announced that it would remain closed indefinitely, citing a lack of capital.
“We are extremely grateful to our investors, employees and business partners for supporting us throughout the restart process and in these uncertain times,” Limetree Bay CEO Jeff Rinker said in a statement on Monday. “Severe financial and regulatory constraints left us with no other choice than to continue down this path, after careful consideration of all the alternatives. The Chapter 11 process provides Limetree with the clearest path to maximize the value of our domain for our stakeholders while safely preparing the refinery for an extended shutdown. “
Earlier Monday, the Justice Department announced a federal complaint against the refinery, saying it continued to pose a threat to the local environment and people. The company agreed that any resumption of operations would be accompanied by precautions such as installing air monitors for hydrogen sulfide and sulfur dioxide.
The refinery is the defendant in several separate class actions brought by residents of the island of Sainte-Croix, which claim that the oil vapors released by the facility were detrimental to their health. The Chapter 11 filing could potentially prevent payments to complainants in these complaints.
“The business tool of corporate bankruptcy generally does not benefit normal ordinary people who have claims,” Russell Pate, lawyer for several of the claimants, told The Post, noting that creditors and shareholders are usually paid before class action claimants in such circumstances.
The Hill has contacted the Justice Department for comment.