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Olympic Pipe Line Files For Chap 11 Bankruptcy Protection
SEATTLE (AP)--Citing costs from a firestorm in which three people died after gasoline leaked into a creek in Bellingham, Olympic Pipe Line Co. has filed for bankruptcy protection. Olympic Pipe Line Co. of Renton, owned 62.5% by BP (BP) and 37.5% by Shell (RD), filed the Chapter 11 petition for reorganization Thursday. Neither oil company is party to the filing. Lawyers and company officials said Olympic would maintain operations without any layoffs, complete critical safety improvements on schedule and pay fines and penalties resulting from the pipeline rupture and fire despite the filing. State and federal agencies will be asked to allow more time to finish some improvements that do not immediately affect safety in the 400 miles of pipe linking refineries near Bellingham and Anacortes with Seattle and Portland, Ore., 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. "Safety is our top priority," Olympic president Bobby J. Talley told The Seattle Times on Thursday night. A break in the buried pipeline released 229,000 gallons of gasoline into Whatcom Creek on June 10, 1999. Wade King and Stephen Tsiorvas, both 10, and Liam Wood, 18, died after the fuel caught fire. Payment of a $75 million settlement with the families of King and Tsiorvas and an undisclosed sum to Wood's survivors has been handled by insurers and is not affected by the bankruptcy filing, Olympic officials said. Talley said Olympic intends to pay $6 million in fines and $5 million in penalties the company faces under a guilty plea in December to federal charges stemming from the rupture. U.S. District Judge Barbara Jacobs Rothstein has set sentencing for June 2. Olympic will immediately ask a bankruptcy judge to allow payment of the company's first installment of $1 million at the time of sentencing, company lawyer Angelo J. Calfo wrote in a letter to Rothstein. The bankruptcy filing "is not aimed at avoiding" civil or criminal penalties, Calfo wrote. "In fact, Olympic believes that this bankruptcy filing will improve Olympic's ability to meet its obligations." Talley said Olympic intends to spend $15 million on tougher inspections and safety improvements as promised in a consent decree the company signed with the Justice Department and Washington state in January. Olympic has pledges of financial backing from BP and Shell to assure continued operations and avoid layoffs, he added. Expenses have been exceeding revenues for years, despite $148 million in loans or loan guarantees from BP and Shell which form the bulk of Olympic's debt, Talley said. The company has few unsecured creditors, he added. He noted that federal regulators recently denied a request to raise rates charged to oil companies that pump fuel through the line and state officials approved only a slight increase. Copyright Wall Street Journal
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