Bankruptcy upsets families in pipeline blast
By Jake Ellison

Seattle Post-Intelligencer
29 March 2003

News that Olympic Pipe Line Co. filed for bankruptcy protection fell hard on family members of two of the three victims killed in the company's 1999 gasoline spill and ensuing explosion in Bellingham, an attorney for the families said yesterday.

"They are both hurt and concerned," said David Beninger, one of the Seattle attorneys who represented the families of Wade King and Stephen Tsiorvas, both 10, in a $75 million lawsuit against the company. The survivors of the third victim, 18- year-old Liam Wood, received an undisclosed sum.

Even though the settlement payments have been handled by insurers and are not affected by Thursday's bankruptcy filing, Beninger said the families are worried by the bankruptcy because they have been fighting "to make sure this never happens to anyone else." Now they fear that under the cover of bankruptcy, Olympic may try to shirk some of its commitments to making the pipeline safe.

Olympic's president, Bobby Talley, said the bankruptcy process will ensure that the company can "continue to operate the pipeline and keep safety as a top priority." And, he said, because the company won't have interruptions in the operation of the pipeline, it will be able to pay its debts "and complete projects that support safe and secure operation of the pipeline."

"If this line is not safe, I will shut it down," Talley emphasized.

He said the company's owners have made $149 million in loans and loan guarantees to keep Olympic running and will continue to finance the company during reorganization. Arco Midcon LLC, part of the oil company BP, owns roughly 62.5 percent of the company and Shell Pipeline Co. owns the remainder.

"The biggest losers" in the bankruptcy process, Talley said, "are shareholders . . . because they may not see that money back."

According to Tom Bucknell, an attorney representing Olympic in its filing, most of the remaining $401 million listed among Olympic's debts are claims made by oil companies for losses they say they suffered when the pipeline shut down for a time after the 1999 accident. Olympic disputes many of those claims, Bucknell said.

Also listed as an unsecured creditor is the Washington state Department of Ecology, with a claim of $2.5 million.

Company officials said Olympic will maintain operations without any layoffs and will pay some $6 million in fines and $5 million in penalties it faces under a guilty plea it made in December to federal charges stemming from the rupture.

Among the goals of reorganization, Talley said, will be to pay its debts with interest over time and to persuade state and federal regulators to allow Olympic to charge oil companies more for the use of the pipeline.

Talley hopes the bankruptcy process will take less than a year to complete. And, according to Bucknell, Olympic will continue to operate during that time with its present management.

State and federal agencies also will be asked to allow more time to finish some improvements that do not immediately affect safety in the 400 miles of pipe that links refineries near Bellingham and Anacortes with Seattle and Portland, company officials said.

The pipeline is the sole delivery system for jet fuel to Seattle-Tacoma International Airport and a major supplier to Portland International Airport.

P-I reporter Todd Bishop and The Associated Press contributed to this report. P-I reporter Jake Ellison can be reached at 206-448-8346 or

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