Creditors Near Deal On Gulf Agencies Give Tentative Approval To Reorganization Plan

Creditors fighting over Gulf USA Corp.’s assets neared agreement Wednesday to a plan for reorganizing the bankrupt firm.

Gulf bondholders, pensioners, the federal Environmental Protection Agency and the Coeur d’Alene Indian Tribe have battled over Gulf’s corpse in court since 1993.

A proposed settlement was sent to creditors in April. Pensioners figure to get the largest share of Gulf’s reorganized assets - they’re getting more than $40 million to maintain their medical benefits.

However, that amount includes substantial cuts in the previous medical benefits package. Pensioners face higher deductibles, copayments for prescription drugs and less supplemental medical insurance after Medicare coverage ends.

The EPA, Department of Justice and other government agencies gave only tentative approval to the plan in bankruptcy court Wednesday. The EPA is in charge of cleaning up the Bunker Hill Superfund site. A large portion of that cleanup bill was expected to be paid by Gulf prior to the company’s bankruptcy.

The EPA will get only a fraction of what is needed to clean up the site, leaving taxpayers to pick up the tab. The Bunker cleanup is estimated to cost $100 million.

Gulf bondholders who invested in the company back in the 1980s will receive about $5 million, said Ford Elsaesser of Sandpoint, the bondholders’ attorney.

The bondholders also get a portion of the new stock in the reorganized Gulf, and will also receive Kellogg property formerly designated to be owned by the government and the Coeur d’Alene tribe, Elsaesser said.

The so-called East Ridge property lies near the Silver Mountain Resort, and is expected to gain value as the resort grows.

The amount bondholders will receive could grow if lawsuits pending against former directors accused of mismanaging the firm yield monetary damages, he said.

The final step in approving the reorganization plan should happen June 29. The government parties and Elsaesser’s unsecured creditors committee all are expected to sign on to the deal.

“We’re reasonably certain it’s going to go through,” he said. “We’re recommending the settlement to our committee.”

, DataTimes