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UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In re O.W. Bunker Holding North America Inc., et al., 1 Debtors. : : : : : : : Chapter 11 Case No. 14-51720 Jointly Administered MOTION FOR ENTRY OF ORDER (A) APPROVING SETTLEMENT AGREEMENT BETWEEN THE DEBTORS AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, NUSTAR ENERGY SERVICES, INC., NUSTAR SUPPLY & TRADING LLC AND NUSTAR TERMINALS MARINE SERVICES N.V. RELATING TO (I) THE JOINT MOTION OF THE DEBTORS AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR THE TRANSFER OF VENUE OF CASES TO UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK PURSUANT TO 28 U.S.C. §1412 AND RULE 1014(A)(1) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE [DOCKET NO. 229]; (II) CLAIMS FILED BY EACH OF THE NUSTAR ENTITIES LISTED; (III) ADVERSARY PROCEEDING NO. 14-05060; (IV) ASSIGNMENT AND SALE OF DEBTORS’ RIGHTS, TITLE AND INTERESTS AGAINST CERTAIN VESSELS AND VESSEL OWNERS PURSUANT TO 11 U.S.C. 363(F); (V) SECURITY OR RECOVERIES RECEIVED BY NUSTAR ENERGY SERVICES INC. FROM ARRESTING VESSELS; AND (VI) CERTAIN RELATED ISSUES AND CONTESTED MATTERS, AND (B) TRANSFERRING THE DEBTORS’ CHAPTER 11 CASES TO THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK The Debtors hereby move for entry of an order, substantially in the form attached hereto, pursuant to Rule 9019 (the “9019 Motion”) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), approving the agreement (the “Settlement Agreement”) by and between the Debtors and the Official Committee of Unsecured Creditors of O.W. Bunker Holding North America Inc., et al. (the “Committee”), NuStar Energy Services, Inc. (“NuStar Services”), 1 The last four digits of the Debtors’ taxpayer identification numbers follow in parentheses: O.W. Bunker Holding North America Inc. (7474), O.W. Bunker North America Inc. (7158) and O.W. Bunker USA Inc. (3556). The Debtors’ address is 281 Tresser Blvd., 2 Stamford Plaza, 15th Floor, Stamford, CT 06901. 3862235v1 Case 14-51720 Doc 542 Filed 03/19/15 Entered 03/19/15 19:03:32 Desc Main Document Page 1 of 14

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  • UNITED STATES BANKRUPTCY COURT

    DISTRICT OF CONNECTICUT

    BRIDGEPORT DIVISION

    In re O.W. Bunker Holding North America Inc., et al.,1 Debtors.

    : : : : : : :

    Chapter 11 Case No. 14-51720 Jointly Administered

    MOTION FOR ENTRY OF ORDER

    (A) APPROVING SETTLEMENT AGREEMENT BETWEEN THE DEBTORS AND

    THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, NUSTAR ENERGY

    SERVICES, INC., NUSTAR SUPPLY & TRADING LLC AND NUSTAR TERMINALS

    MARINE SERVICES N.V. RELATING TO (I) THE JOINT MOTION OF THE

    DEBTORS AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR

    THE TRANSFER OF VENUE OF CASES TO UNITED STATES BANKRUPTCY

    COURT FOR THE SOUTHERN DISTRICT OF NEW YORK PURSUANT TO 28 U.S.C.

    §1412 AND RULE 1014(A)(1) OF THE FEDERAL RULES OF BANKRUPTCY

    PROCEDURE [DOCKET NO. 229]; (II) CLAIMS FILED BY EACH OF THE NUSTAR

    ENTITIES LISTED; (III) ADVERSARY PROCEEDING NO. 14-05060; (IV)

    ASSIGNMENT AND SALE OF DEBTORS’ RIGHTS, TITLE AND INTERESTS

    AGAINST CERTAIN VESSELS AND VESSEL OWNERS PURSUANT TO 11 U.S.C.

    363(F); (V) SECURITY OR RECOVERIES RECEIVED BY NUSTAR ENERGY

    SERVICES INC. FROM ARRESTING VESSELS; AND (VI) CERTAIN RELATED

    ISSUES AND CONTESTED MATTERS, AND

    (B) TRANSFERRING THE DEBTORS’ CHAPTER 11 CASES TO THE UNITED

    STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

    The Debtors hereby move for entry of an order, substantially in the form attached hereto,

    pursuant to Rule 9019 (the “9019 Motion”) of the Federal Rules of Bankruptcy Procedure (the

    “Bankruptcy Rules”), approving the agreement (the “Settlement Agreement”) by and between

    the Debtors and the Official Committee of Unsecured Creditors of O.W. Bunker Holding North

    America Inc., et al. (the “Committee”), NuStar Energy Services, Inc. (“NuStar Services”),

    1 The last four digits of the Debtors’ taxpayer identification numbers follow in parentheses: O.W. Bunker Holding North America Inc. (7474), O.W. Bunker North America Inc. (7158) and O.W. Bunker USA Inc. (3556). The Debtors’ address is 281 Tresser Blvd., 2 Stamford Plaza, 15th Floor, Stamford, CT 06901.

    3862235v1

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    NuStar Supply & Trading LLC (“NuStar Supply”), and NuStar Terminals Marine Services N.V.

    (“NuStar Terminals”)2, arising from and resolving NuStar’s objection to the Joint Motion of the

    Debtors and the Official Committee of Unsecured Creditors for Transfer of Venue of Cases to

    the United States Bankruptcy Court for the Southern District of New York Pursuant to 28 U.S.C.

    § 1412 and Rule 1014(a)(1) of the Federal Rules of Bankruptcy Procedure [Docket No. 229] (the

    “Transfer Motion”), and resolving other litigation and disputes between the Debtors and NuStar.

    Specifically, the Debtors seek approval of the terms and provisions of the Settlement Agreement

    by which such disputes, subject to Court approval, have been settled and resolved and,

    concurrently therewith, entry of an order granting the Transfer Motion. The Debtors and NuStar

    have executed the Settlement Agreement, and the Committee’s counsel has indicated that upon

    affirmative vote by the Committee, which is expected, the Committee will execute it as well.

    In further support of the Motion, the Debtors, by and through their undersigned counsel,

    respectfully state as follows:

    JURISDICTION

    1. This Court has jurisdiction to consider this Motion under 28 U.S.C. §§157 and

    1334. This is a core proceeding under 28 U.S.C. §157(b). Venue of these cases and this Motion

    in this district is proper under 28 U.S.C. §§1408 and 1409. The relief requested herein is

    warranted pursuant to Bankruptcy Rule 9019.

    BACKGROUND

    Procedural Background

    2. On November 13, 2014 (the “Petition Date”), each of the Debtors commenced a

    voluntary case in this Court (the “Chapter 11 Cases”) under chapter 11 of the Bankruptcy Code.

    2 NuStar Services, NuStar Supply and NuStar Terminals are collectively referred to herein as“NuStar”

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    The Debtors are authorized to continue to operate their business and manage their properties as

    debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On

    November 19, 2014, this Court ordered that the Debtors’ cases be jointly administered for

    procedural purposes pursuant to Bankruptcy Rule 1015(b) and D. Conn. LBR 1015-1.

    3. The factual background regarding the Debtors, including their business

    operations, their capital and debt structures, and the events leading to the filing of the Chapter 11

    Cases, is set forth in detail in the Declaration of Adrian Tolson, General Manager of O.W.

    Bunker North America Inc., in Support of Chapter 11 Petitions and First Day Pleadings [Docket

    No. 15] (the “Tolson Declaration”).

    4. On November 26, 2014, the United States Trustee appointed the Committee. No

    trustee or examiner has been appointed in the Debtors’ Chapter 11 Cases.

    Background Regarding the Transfer Motion

    5. Between the Petition Date and the filing of the Transfer Motion on December 24,

    2014, several of the Debtors’ customers filed multiple interpleader actions in several different

    district courts. These include more than ten actions – involving deposits with the Court of more

    than $24 million, more than 25 vessels and more than 40 parties -- in the United States District

    Court for the Southern District of New York (the “Southern District of New York”). Such

    interpleaders generally seek to make payment and an adjudication of claims relating to the

    Debtors’ and their affiliates’ transactions in marine fuel oil under principles of maritime law.

    Those district courts outside the District of Connecticut handling the interpleader actions, and

    various other proceedings, cannot lawfully or constitutionally exercise bankruptcy jurisdiction

    because this Court has exclusive bankruptcy jurisdiction based upon the pendency of the Chapter

    11 Cases. The separation of maritime and bankruptcy jurisdiction in different districts prevented

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    these courts from affording complete relief to the parties or resolving all claims in one court.

    This is a particular problem since many of the interpleaders raise bankruptcy issues that are

    subject to the exclusive jurisdiction of the Bankruptcy Court handling the Chapter 11 Cases.

    6. In turn, the division of maritime and bankruptcy jurisdiction in multiple districts,

    and the burden and expense of seeking the transfer of all of these proceedings to the District of

    Connecticut, created the very real prospect of enormous added costs and uncertainties for all

    parties in interest, including the Debtors. In addition, while the Southern District of New York

    can exercise personal jurisdiction over a number of foreign parties to the interpleaders based on

    such entities’ contractual consent to such jurisdiction, there were concerns that the District of

    Connecticut might not be able to exercise personal jurisdiction over such parties (or that they

    would wage a long and expensive fight over that issue in Connecticut). Accordingly, the

    Debtors and the Committee jointly filed the Transfer Motion.

    7. At the January 7, 2015 initial hearing on the Transfer Motion, this Court

    recognized that the Debtors’ and the Committee’s rationale underlying the Transfer Motion was

    that:

    There is more expense that will be incurred because of having at least two courts working on the same problem, or similar problems or overlapping problems, and there is a good likelihood that with one jurisdiction, that being the Southern District of New York …a lot of the issues could be resolved in [the Southern District of New York] that couldn’t be resolved in a bankruptcy court in Connecticut. It seems to me that there is merit to that argument . .

    See 1/7/2015 Hr’g Tr. 98:13-25.

    8. Indeed, District Judge Caproni, who is presiding over the interpleader actions in

    the Southern District of New York, observed that “this division between the bankruptcy court

    and Connecticut and [this Court] sitting as an admiralty court should not continue because this is

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    not an efficient way of resolving” the complicated issues of maritime and bankruptcy jurisdiction

    arising in the Chapter 11 Cases. See 12/18/2014 Hr’g Tr. 74:6-12, Clearlake Shipping Pte. Ltd.

    v. O.W. Bunker (Switzerland) SA, et al., Case No. 14-cv-9286 (VEC) (S.D.N.Y.)

    9. On December 24, 2014, and in recognition of Judge Caproni’s observation, the

    Debtors and the Committee jointly filed the Transfer Motion.

    10. On January 2, 2015, NuStar filed an objection to the Transfer Motion [Docket No.

    255] (the “NuStar Objection”). On January 14, 2015, this Court entered a Pre-Trial Order

    [Docket No. 331] setting forth the limitations on and time for discovery and scheduling an

    evidentiary hearing on the Transfer Motion for February 18, 2015.

    11. This Court heard opening statements and initial evidence on the Transfer Motion

    on February 18, 2015, and continued the evidentiary hearing to March 9, 2015. Between

    February 18, 2015 and March 9, 2015, NuStar, the Committee and the Debtors engaged in

    expert-related discovery while concurrently attempting to reach a comprehensive resolution of

    the NuStar Objection and certain related issues.

    The Settlement Agreement

    12. The Parties engaged in extensive, arms-length negotiations with respect to

    resolution of the NuStar Objection to the Transfer Motion and other matters related to the

    pending bankruptcy cases. These discussions culminated in the attached settlement agreement

    resolving numerous issues with NuStar, including the NuStar Objection to the Transfer Motion,

    and paving the way for the entry of an order granting the 9019 Motion and transferring the

    Chapter 11 Cases to the Southern District of New York so that the Chapter 11 Cases and the

    Southern District of New York interpleader cases will be before one court. With the transfer, the

    Southern District of New York will be able to exercise the full panoply of federal maritime and

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    bankruptcy jurisdiction and will be able to comprehensively address the overlapping and

    complicated issues pending concurrently in the interpleaders in the Southern District of New

    York and in the Chapter 11 Cases.

    13. A copy of the Settlement Agreement is attached hereto as Exhibit A and is

    incorporated herein in its entirety by reference. The following summary of the salient terms of

    the Settlement Agreement provides the basic framework of its terms to the Court and other

    parties in interest in the Chapter 11 Cases. However, nothing in the summary should be

    construed as supplanting or supplementing the detailed terms set forth in the Settlement

    Agreement. Any conflict between the terms of the Settlement Agreement and the summary

    should be resolved in favor of the Settlement Agreement. In summary, the Settlement

    Agreement provides that:

    a. The Debtors and NuStar have agreed to resolve the adversary proceeding captioned NuStar Supply & Trading LLC v. O.W. Bunker North America Inc., Adv. Proc. No. 14-05060, pending before this Court (the “NuStar Adversary Proceeding”), and other outstanding reclamation-related issues regarding oil onboard the Eva Schulte and the Elisalex Schulte. This settlement will provide a $3,454,938.03 reduction to NuStar Supply’s Section 503(b)(9) (and parallel unsecured) claim, which NuStar Supply asserts is $6,772,447.58; this results in an allowed claim of $3,317,509.55. The settlement also confirms NuStar Supply’s rights to certain oil that was reclaimed from such vessels, and provides that NuStar shall voluntarily dismiss the NuStar Adversary Proceeding with prejudice within five (5) days after the entry of a final, non-appealable order approving the settlement. Settlement Agreement ¶¶1-12, 62.

    b. The Debtors have agreed to assign to NuStar all of the Debtors’ rights in certain vessel arrest proceedings where the Debtors were an intermediary supplier (i.e., not a contract supplier or physical supplier) for a $151,000 payment (the “Cash Payment,” which goes into a segregated account to which all liens, claims and encumbrances [if any] shall attach). Settlement Agreement ¶¶13-35, 44-50. In addition, the Debtors are assigning their lien rights in certain pending cases where they are the contract supplier (i.e., the Global Leader and the Norwegian Jewel). Settlement Agreement ¶¶ 15, 20. In furtherance of the agreement to assign such rights, the Debtors have agreed to provide certain assistance, support and

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    documentary evidence to NuStar (in part at NuStar’s expense) in such proceedings.3 In addition to the Cash Payment, the Debtors also receive a reduction of NuStar Supply’s and NuStar Terminal’s Section 503(b)(9) and other claims for the recoveries obtained by them in such proceedings. Settlement Agreement ¶¶51-53. As to the potential size and value of that claims reduction to the Debtors, pursuant to disclosures filed by NuStar in this Court [at Docket No. 16 in the NuStar Adversary Proceeding], over $12.8 million in security had been deposited or posted in those arrest proceedings as of February 16, 2015.

    c. NuStar has agreed to support the transfer of venue of the Chapter 11 Cases to the Southern District of New York, and the proposed Order granting the 9019 Motion contains express language transferring the Chapter 11 Cases to the Southern District of New York pursuant to 28 U.S.C. §1412 in the interest of justice and for the convenience of the parties, and the Debtors’ agreement to the terms of the Settlement Agreement is conditioned upon transfer. Settlement Agreement ¶¶23, 54.

    d. NuStar has agreed, subject to certain conditions, to venue in the Southern District of New York for six vessels currently subject to interpleader proceedings: Venus Glory, Hellas Glory, LNG Finima, Ocean Friend, Rigel Leader, and Waregem (the “Southern District of New York Interpleaders”). With regard to three of these vessels (Ocean Friend, Rigel Leader, and Waregem), one of the Debtors is a contract supplier and the relative lien rights of NuStar and the Debtors will be decided in those cases in New York. Settlement Agreement ¶¶21-43.

    e. The Parties agree that neither the Debtors nor the Committee will take any action to remove, transfer or consolidate certain NuStar vessel arrest proceedings that are currently pending in other jurisdictions (mostly in the United States District Court for the Southern District of Texas). Id., ¶17.

    f. NuStar has agreed not to arrest any vessel not already set forth in the Settlement Agreement except in coordination with the Debtors. Id., ¶80.

    g. NuStar consents to the Debtors’ motion to extend the Debtors’ exclusive periods to file and solicit a plan of liquidation for 120 days, each, and will not move to convert the Chapter 11 Cases during these 120-day periods. Id., ¶56-57.

    h. The Settlement Agreement is expressly conditioned on the Court’s approval of the Transfer Motion and ordering a transfer of venue of the Chapter 11 Cases to the Southern District of New York. Id., ¶53.

    3 The Debtors continue to analyze the feasibility of transferring interpleader actions pending outside the Southern District of New York, not including the Texas and Panama Proceedings, to the Southern District of New York.

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    RELIEF REQUESTED

    14. The Debtors request that, pursuant to Bankruptcy Rule 9019, the Court enter an

    order, substantially in the form attached hereto as Exhibit B, approving the Settlement

    Agreement and transferring the Chapter 11 Cases to the Southern District of New York.

    BASIS FOR RELIEF REQUESTED

    Legal Standard

    15. Bankruptcy Rule 9019(a) governs the approval of compromises and settlements

    and provides that “[o]n motion by the trustee and after notice and a hearing, the court may

    approve a compromise or settlement.” In approving a compromise and settlement, the Court is

    required to make an “informed and independent judgment” as to whether the compromise and

    settlement is fair and equitable based on an:

    [e]ducated estimate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise. Basic to this process in every instance, of course, is the need to compare the terms of the compromise with the likely rewards of litigation.

    Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390

    U.S. 414, 424-25 (1968).

    16. The Court has discretion to approve a compromise. Fischer v. Pereira (In re 47-

    49 Charles Street, Inc.), 209 B.R. 618 (S.D.N.Y. 1997). In doing so, the Court must “make an

    informed judgment whether the settlement is fair and equitable and in the best interests of the

    estate.” In re Drexel Burnham Lambert Group, Inc., 134 B.R. 493, 496 (Bankr. S.D.N.Y. 1991).

    The Court is “required to review the reasonableness of the proposed settlement,” In re Drexel

    Burnham Lambert Group, Inc., 138 B.R. 723, 758 (Bankr. S.D.N.Y. 1992), but does not decide

    questions of law and fact. Instead, the Court determines, “whether the settlement falls below the

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    lowest point in the range of reasonableness.” In re: W.T. Grant, Co., 699 F.2d 599, 608 (2d Cir.

    1983).

    17. Courts in the Second Circuit examine several factors to determine whether to

    accept a settlement.

    1. the balance between the litigation's possibility of success and the settlement's future benefits;

    2. the likelihood of complex and protracted litigation, with its attendant expense, inconvenience, and delay, including the difficulty in collecting on the judgment;

    3. the paramount interests of the creditors, including each affected class's relative benefits and the degree to which creditors either do not object to or affirmatively support the proposed settlement;

    4. whether other parties in interest support the settlement;

    5. the competency and experience of counsel supporting, and the experience and knowledge of the bankruptcy court judge reviewing, the settlement;

    6. the nature and breadth of releases to be obtained by officers and directors;

    7. the extent to which the settlement is the product of arm’s length bargaining.

    In re: Iridium Operating, LLC, 478 F.3d 452, 462 (2d Cir. 2007) (citing In re: WorldCom, Inc.,

    347 B.R. 123, 137 (Bankr. S.D.N.Y. 2006) (internal citation omitted))(the “Iridium Factors”);

    see also TMT Trailer Ferry, 390 U.S. at 424.

    The Settlement Agreement Satisfies the Second Circuit’s Iridium Factors

    18. The Debtors filed the Transfer Motion in the exercise of their fiduciary

    obligations to minimize the expenses incurred from proceeding in multiple jurisdictions on

    overlapping questions of maritime law and bankruptcy law. The Debtors’ goal in filing the

    Transfer Motion was to get the Chapter 11 Cases before one court that could address all of the

    issues – including bankruptcy issues such as preferences -- as they relate to maritime

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    interpleaders and vessel arrest proceedings. While the Debtors believe that they have satisfied

    their burden of proof regarding the Transfer Motion, and that the transfer of the Chapter 11

    Cases to the Southern District of New York is in the interest of justice and for the convenience of

    the parties, NuStar’s request for an evidentiary hearing increased the uncertainty that the

    Transfer Motion would be approved expeditiously. Additionally, the Court has indicated that it

    would request post-trial briefing and schedule a subsequent date for closing arguments after

    briefing is concluded.

    19. The Settlement Agreement and 9019 Motion pave the way for a consolidated

    bankruptcy and maritime proceeding in the Southern District of New York that will significantly

    increase the chances of filing a plan that provides a meaningful distribution to the Debtors’

    unsecured creditors. The Settlement Agreement resolves the NuStar Objection insofar as NuStar

    shall agree to the transfer of the Chapter 11 Cases to the Southern District of New York if all

    aspects of the Settlement Agreement are approved and the attached Order granting the 9019

    Motion is entered.4 The Settlement Agreement also provides that NuStar will consent to the

    jurisdiction and venue of the Southern District of New York Interpleaders (in the case of the

    Ocean Friend, Rigel Leader, and Waregem actions, such consent is conditioned on a stipulation

    involving the vessel owners). The Settlement Agreement also resolves several contested matters

    and the NuStar Adversary Proceeding, which ultimately will benefit the Debtors’ unsecured

    creditors by reducing litigation costs and reducing NuStar’s claims.

    20. The Settlement Agreement also provides an additional benefit to the Debtors in

    that they will not need to appear and litigate their mark-up on the transactions being litigated in

    the Texas and Panama Proceedings and certain others, but rather they receive the Cash Payment

    4 For removal of doubt, the Settlement Agreement is ineffective without the Court’s agreement to transfer the Chapter 11 Cases to the Southern District of New York.

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    without having to engage in that litigation. The Chapter 11 Cases are already subject to

    complex, multi-district litigation which address a multitude a questions regarding domestic and

    international maritime law and the effect the Bankruptcy Code has on vessel arrest proceedings

    and maritime interpleader actions. The Settlement Agreement eliminates some of the complexity

    and expense associated with enforcing the Debtors’ maritime lien rights. Not only does the

    Settlement Agreement have the benefit of a consensual transfer of these cases to the Southern

    District of New York (subject to this Court’s approval), but it also has the substantial benefit of

    eliminating or limiting venue and jurisdictional litigation related to Southern District of New

    York Interpleaders. For these reasons, the Settlement Agreement satisfies the first and second of

    the Second Circuit’s Iridium Factors.

    21. The Committee supports the Settlement Agreement.5 This fact alone should

    satisfy the third Iridium Factor. The third Iridium Factor is likewise satisfied because the

    Settlement Agreement provides substantial benefits to the Debtors’ unsecured creditors. With

    regard to the resolution of the reclamation matters (Settlement Agreement ¶¶1-12), it resolves the

    NuStar Adversary Proceeding and results in a multi-million dollar reduction of NuStar Supply’s

    claim (including its Section 503(b)(9) claim). These reductions will ultimately increase the

    available pool of money for the unsecured creditors in the Chapter 11 Cases. With regard to the

    resolution of the vessel arrest matters (Settlement Agreement ¶¶13-53), in addition to the

    $151,000 Cash Payment, any amounts recovered by NuStar from the prosecution of the Texas

    and Panama Proceedings and certain other such proceedings will also benefit the unsecured

    creditors by providing a dollar for dollar reduction in NuStar Services’ claim (including its

    5 As noted at the initial January 7, 2015 hearing on the Transfer Motion, NuStar is a member of the Committee. Committee counsel has represented to the Debtors that: (1) NuStar did not participate in the discussions or deliberations that culminated in the Committee’s decision to support the settlement and 9019 Motion; and (2) the non-NuStar Committee members unanimously voted to support the settlement terms.

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    Section 503(b)(9) claim). As noted above, NuStar has filed reports with the Court indicating that

    over $12.8 million had been deposited or posted as security in those proceedings as of mid-

    February. Reducing NuStar’s claims in the Chapter 11 Cases will ultimately increase the pool of

    money available for distribution to the Debtors’ remaining unsecured creditors. Finally, the

    Settlement Agreement resolves litigation between the Debtors and NuStar relating to the

    Transfer Motion.

    22. The fourth Iridium Factor also weighs in favor of approving the Settlement

    Agreement. The plaintiffs in the Southern District of New York Interpleaders—who are

    customers of the Debtors and owe the Debtors’ estates payments for product delivered—are

    parties in interest in the Chapter 11 Cases and clearly benefit from the Chapter 11 Cases and the

    Southern New York Interpleaders being venued in the same district. The Debtors believe that

    certain plaintiff vessel owners in Southern District of New York Interpleaders support approval

    of the Settlement Agreement and the transfer of the Chapter 11 Cases to the Southern District of

    New York.

    23. In addition, the fifth through seventh Iridium Factors support the Court’s approval

    of the Settlement Agreement. The Debtors submit that the Settlement Agreement was the result

    of extensive, arms-length negotiations conducted by experienced counsel for the Debtors,

    NuStar, and the Committee. Additionally, this Court has a plethora of experience in approving

    settlement agreements that are similar in scope and complexity to the instant Settlement

    Agreement.

    24. In conclusion, the Settlement Agreement satisfies the Second Circuit’s Iridium

    Factors, provides significant benefits to the Debtors’ estates and their unsecured creditors,

    exceeds the “lowest point in the range of reasonableness,” and should be approved by this Court.

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    Indeed, approval of the Settlement Agreement and the transfer of the Chapter 11 Cases to the

    Southern District of New York would significantly increase the chances of a meaningful

    distribution to the Debtors’ creditor body. Accordingly, the Debtors respectfully request that the

    Court grant this 9019 Motion, approve the Settlement Agreement in its entirety, and transfer the

    Chapter 11 Cases to the Southern District of New York.

    NOTICE

    25. Notice of this Motion will be given to (a) the United States Trustee for the District

    of Connecticut; (b) counsel to the Committee; (c) counsel to NuStar; (d) counsel to ING Bank,

    N.V.; (e) all creditors; and (f) other parties in interest requesting notice in the Chapter 11 Cases

    pursuant to Bankruptcy Rule 2002. The Debtors submit that, under the circumstances, no other

    or further notice is required.

    NO PRIOR REQUEST

    26. No previous motion for the relief requested herein has been made to this or any

    other court.

    CONCLUSION

    WHEREFORE, the Debtors respectfully request the Court to enter an order,

    substantially in the form attached hereto as Exhibit B, granting the relief requested in the Motion

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    and such other and further relief as may be just and proper.

    Dated: Hartford, Connecticut March 19, 2015

    Respectfully submitted, /s/Patrick M. Birney Michael R. Enright, Esq. (ct10286) Patrick M. Birney, Esq. (ct19875) ROBINSON & COLE LLP 280 Trumbull Street Hartford, CT 06103 Telephone: (860) 275-8290 Facsimile: (860) 275-8299 [email protected] [email protected] - and - Natalie D. Ramsey, Esq. (NY #5242730) (admitted pro hac vice) Richard G. Placey, Esq. (PA #37713) (admitted pro hac vice)

    Joseph O’Neil, Esq. (NY #2596435) (admitted pro hac vice) Davis Lee Wright, Esq. (NY #4761300) (admitted pro hac vice) MONTGOMERY, McCRACKEN, WALKER & RHOADS, LLP 437 Madison Avenue, 29th Floor New York, NY 10022 Telephone: (212) 867-9500 Facsimile: (212) 599-1759 [email protected] [email protected] jo’[email protected] [email protected] Counsel for the Debtors and Debtors in Possession

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  • EXHIBIT A

    (Settlement Agreement)

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  • EXHIBIT B

    (Proposed Order)

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  • UNITED STATES BANKRUPTCY COURT

    DISTRICT OF CONNECTICUT

    BRIDGEPORT DIVISION

    In re O.W. Bunker Holding North America Inc., et al.,1 Debtors.

    : : : : : : :

    Chapter 11 Case No. 14-51720 Jointly Administered

    [PROPOSED ORDER – DOCKET NO. ___]

    ORDER GRANTING MOTION FOR ENTRY OF ORDER (A) APPROVING

    SETTLEMENT AGREEMENT BETWEEN THE DEBTORS AND THE OFFICIAL

    COMMITTEE OF UNSECURED CREDITORS, NUSTAR ENERGY SERVICES, INC.,

    NUSTAR SUPPLY & TRADING LLC AND NUSTAR TERMINALS MARINE

    SERVICES N.V. RELATING TO (I) THE JOINT MOTION OF THE DEBTORS

    AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR THE

    TRANSFER OF VENUE OF CASES TO UNITED STATES BANKRUPTCY

    COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

    PURSUANT TO 28 U.S.C. §1412 AND RULE 1014(A)(1) OF THE FEDERAL

    RULES OF BANKRUPTCY PROCEDURE (D.I. No. 229); (II) CLAIMS FILED BY

    EACH OF THE NUSTAR ENTITIES LISTED; (III) ADVERSARY PROCEEDING

    NO. 14-05060, (IV) ASSIGNMENT AND SALE OF DEBTORS’ RIGHTS, TITLE

    AND INTERESTS AGAINST CERTAIN VESSELS AND VESSEL OWNERS

    PURSUANT TO 11 U.S.C. 363(F), AND (V) SECURITY OR RECOVERIES RECEIVED

    BY NUSTAR ENERGY SERVICES INC. FROM ARRESTING VESSELS AND (VI)

    CERTAIN RELATED ISSUES AND CONTESTED MATTERS AND (B)

    TRANSFERRING THE DEBTORS’ CHAPTER 11 CASES TO THE UNITED STATES

    DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

    This matter coming before the Court on the Motion For Entry of Order (A) Approving

    Settlement Agreement Between the Debtors and the Official Committee of Unsecured Creditors,

    NuStar Energy Services, Inc., NuStar Supply & Trading LLC and NuStar Terminals Marine

    Services N.V. Relating to (I) The Joint Motion of the Debtors and the Official Committee of

    Unsecured Creditors for the Transfer of Venue of Cases to United States Bankruptcy Court for

    the Southern District of New York Pursuant to 28 U.S.C. §1412 and Rule 1014(A)(1) of the

    1 The last four digits of the Debtors’ taxpayer identification numbers follow in parentheses: O.W. Bunker Holding North America Inc. (7474), O.W. Bunker North America Inc. (7158) and O.W. Bunker USA Inc. (3556). The Debtors’ address is 281 Tresser Blvd., 2 Stamford Plaza, 15th Floor, Stamford, CT 06901.

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  • -2-

    Federal Rules of Bankruptcy Procedure (D.I. No. 229); (II) Claims Filed by Each of the NuStar

    Entities Listed; (III) Adversary Proceeding No. 14-05060, (IV) Assignment and Sale of Debtors

    Rights, Title and Interests Against Certain Vessels and Vessel Owners Pursuant to 11 U.S.C.

    363(f), and (V) Security or Recoveries Received By NuStar Energy Services Inc. from Arresting

    Vessels and (VI) Certain Related Issues and Contested Matters and (B) Transferring the

    Debtors’ Chapter 11 Cases to the United States District Court for the Southern District of New

    York (the “9019 Motion”); the Court having reviewed the 9019 Motion; the Court finding that (a)

    it has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334, (b) this is a core

    matter pursuant to 28 U.S.C. § 157(b)(2)(A); and (c) notice of the 9019 Motion was sufficient

    under the circumstances; the Court having determined that the legal and factual bases set forth in

    the 9019 Motion establish just cause for the relief granted herein. This Court further finds and

    concludes that, considering the probability of success in the litigation; the complexity of the

    litigation involved; the expense, inconvenience and delay necessarily attending such litigation;

    and the interest of the creditors and a proper deference to their reasonable views, the settlement

    is fair, equitable, and reasonable and in the best interests of the estate and should be approved

    under the standards of Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v.

    Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 20 L. Ed. 2d 1 (1968) and In re Iridium Operating,

    LLC, 478 F.3d 452, 462 (2d Cir. 2007). Accordingly, and after due deliberation and sufficient

    cause appearing therefor:

    IT IS HEREBY ORDERED THAT:

    1. The 9019 Motion is GRANTED.

    2. The Settlement Agreement, a copy of which is attached hereto as Exhibit 1, is approved

    in all respects and the Debtors are authorized to consummate the compromise and settlement embodied in

    the Settlement Agreement subject to the terms and conditions thereof.

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  • -3-

    3. In accordance with such Settlement Agreement:

    a. NuStar Supply & Trading LLC is vested with all right, title and interest in the Reclaimed

    Fuel (as defined in such Settlement Agreement) free and clear of any other liens, claims,

    encumbrances or interests, and NuStar Supply shall irrevocably retain the NuStar

    Reclaimed Fuel Proceeds (as defined in such Settlement Agreement) free and clear of all

    liens, claims, encumbrances or other interests.

    b. NuStar Supply & Trading LLC is vested with all right, title and interest in the Other Fuel

    (as defined in such Settlement Agreement) free and clear of any other liens, claims,

    encumbrances or interests, and shall irrevocably retain free and clear of all liens, claims,

    encumbrances or other interests the $421,489.26 in sales proceeds from the Other Fuel

    free and clear of all liens, claims encumbrances or other interests.

    c. NuStar Supply and Trading LLC is hereby allowed a claim against North America in the

    amount of $3,317,509.55, which shall be a general unsecured claim all of which shall be

    entitled to administrative expense priority under 11 U.S.C. § 503(b)(9). For avoidance of

    doubt, NuStar Supply retains the right pursuant to the Settlement Agreement to an

    increase in its claim in the event that, despite this order, it is nevertheless compelled to

    disgorge some or all of the proceeds of the Other Fuel or make payments to third parties

    asserting claims to the Other Fuel.

    d. In exchange for the cash payment set forth in the Settlement Agreement (which shall be

    placed in a segregated account and to which all liens, claims and encumbrances

    [including those of ING Bank N.V.], if any, shall attach to the same extent, and with the

    same validity and priority, if any, as the security interest asserted in the rights and

    interests being transferred to NuStar pursuant to this Settlement), NuStar Energy

    Services, Inc. is vested with all of O.W. Bunker USA Inc., O.W. Bunker North America

    Inc., and O.W. Bunker North America Holdings, Inc.’s (collectively “Debtors”) right,

    title and interest (including any receivable) as they may exist and without warranty and

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  • -4-

    free and clear of all liens, claims, encumbrances or other interests, including but not

    limited any liens, claims, encumbrances or interests asserted by ING Bank, N.V., arising

    out of or related to the subject bunker transactions and against any party to such

    transaction (and specifically including any current defendant in the litigation listed in the

    footnote below) for the following vessels: Longavi, Freemantle Express, Montevideo

    Express, Canberra Express, Buenos Aires Express, HS DeBussy, Columba, Serena P,

    Navegantes Express, Wellington Express, Cosco Aucklan, DF (formerly Tian Bao He),

    Cosco Venice, Cosco Haifa, Elka Delos, Elka Sirius, Elka Angelique, Jo Ilex, Azure

    Bulker, Azurit, Venus Glory, Hellas Glory, Umgeni, and Oste.2

    e. In exchange for the cash payment set forth in the Settlement Agreement (which shall be

    placed in a segregated account and to which all liens, claims and encumbrances

    [including those of ING Bank N.V.], if any, shall attach to the same extent, and with the

    same validity and priority, if any, as the security interest asserted in the rights and

    interests being transferred to NuStar pursuant to this Settlement), NuStar Terminals

    2 For avoidance of doubt, such subject Bunker transactions are the subject of the following litigations or, where litigation has not been commenced, is the transaction on the delivery date listed: Longavi (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas ; Fremantle Express (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Montevideo Express (Hapag Lloyd); 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Canberra Express (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Buenos Aires Express (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; HS Debussy (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Columba (Hapag Lloyd); No. 4:14-cv-03350, NuStar Energy Services, Inc. v. M/V Columba, Southern District of Texas; Serena P (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Navegantes Express (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Wellington Express (Hapag Lloyd); No. 4:14-cv-03294, NuStar Energy Services, Inc. v. M/V Canberra Express, Southern District of Texas; Cosco Auckland (COSCO); No. 4:14-cv-03648, NuStar Energy Services, Inc. v. M/V COSCO AUCKLAND, et al., Southern District of Texas; DF (formerly Tian Bao He) (COSCO); No. 4:14-cv-03648, NuStar Energy Services, Inc. v. M/V COSCO AUCKLAND, et al., Southern District of Texas; Cosco Venice (COSCO); No. 4:14-cv-03648, NuStar Energy Services, Inc. v. M/V COSCO AUCKLAND, et al., Southern District of Texas; Cosco Haifa (COSCO); No. 4:14-cv-03648, NuStar Energy Services, Inc. v. M/V COSCO AUCKLAND, et al., Southern District of Texas; Elka Delos (European Product Carriers Ltd. (ELKA)); No. 4:14-cv-03686, NuStar Energy Services, Inc. v. ELKA ANGELIQUE, ELKA DELOS, and ELKA SIRIUS, Southern District of Texas; Elka Sirius (European Product Carriers Ltd. (ELKA)); No. 4:14-cv-03686, NuStar Energy Services, Inc. v. ELKA ANGELIQUE, ELKA DELOS, and ELKA SIRIUS, Southern District of Texas ;Elka Angelique (European Product Carriers Ltd. (ELKA)); No. 4:14-cv-03686, NuStar Energy Services, Inc. v. ELKA ANGELIQUE, ELKA DELOS, and ELKA SIRIUS, Southern District of Texas; Jo Ilex (Jo Tankers AS); No. 4:14-cv-03310, JO TANKERS, AS v BERGEN BUNKERS, AS, et al., Southern District of Texas; Azure Bulker (fuel delivered on October 21, 2014 in Houston, Texas); arrest not yet commenced; Azurit (fuel delivered on October 21, 2014 in Houston, Texas); arrest not yet commenced; Venus Glory, (Clearlake Shipping Pte. Ltd.); No. 4:14-cv-09287, Clearlake Shipping Pte. Ltd. v. O.W. Bunker (Switzerland) SA, et al., Southern District of New York; Hellas Glory; (Clearlake Shipping Pte. Ltd.); No. 4:14-cv-09287, Clearlake Shipping Pte. Ltd. v. O.W. Bunker (Switzerland) SA, et al., Southern District of New York; Umgeni (Unicorn Shipping); Action initiated in Belize and dismissed after payment of $53,432.70 to NuStar by Unicorn Shipping; Oste (Waverly Shipping OPCO LLC); AR 71224/2014, Waverley Shipping OPCO LLC and Caribe Tankers LTD/NuStar Energy Services INC, Court in First Instance of Curacao (Dutch Caribbean) (“Summary Proceeding”) and (Waverly Shipping OPCO LLC); AR 72467/2015, Waverley Shipping OPCO LLC and Caribe Tankers LTD/NuStar Energy Services INC, Court in First Instance of Curacao (Dutch Caribbean) (“Trial Proceeding”).

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  • -5-

    Marine Services N.V. is vested with all of O.W. Bunker USA Inc., O.W. Bunker North

    America Inc., and O.W. Bunker North America Holdings, Inc.’s (collectively “Debtors”)

    right, title and interest (including any receivable) as they may exist and without warranty

    and free and clear of all liens, claims, encumbrances or other interests, including but not

    limited to any liens, claims, encumbrances or interests asserted by ING Bank, N.V.,

    arising out of or related to the subject bunker transaction and against any party to such

    transaction (and specifically including any current defendant in the litigation listed in the

    footnote below) for the LNG Finima.3

    f. NuStar Energy Services, Inc. is vested with all of the Debtors’ right, title and interest in

    any maritime liens, vessel arrest rights or similar security, as they may exist and without

    warranty, free and clear of all liens, claims, encumbrances or other interests, including

    but not limited to any liens, claims, encumbrances or interests asserted by ING Bank,

    N.V., arising out of or related to the subject bunker transaction and against any party to

    such transaction (and specifically including any current defendant in the litigation listed

    in the footnote below) for the Global Leader and Norwegian Jewel.4

    4. The Chapter 11 Cases are hereby transferred to the United States District Court for the

    Southern District of New York pursuant to 28 U.S.C. § 1412 and Rule 1014(a)(1) of the Federal Rules of

    Bankruptcy Procedure in the interest of justice and for the convenience of the parties.

    5. This Order shall not modify or otherwise impact the priorities of allowed claims as they

    otherwise exist under the Bankruptcy Code and applicable law.

    3For avoidance of doubt, such subject Bunker transactions are the subject of the following litigations : LNG Finima (Nigeria LNG Ltd.); No. 4:14-cv-09542, Bonny Gas Transport Limited v. O.W. Bunker Germany GmbH, et al., Southern District of New York

    4For avoidance of doubt, such subject Bunker transactions are the subject of the following litigations : Norwegian Jewel (Norwegian Cruise

    Lines); No. 4:14-cv-03282 NuStar Energy Services, Inc. v. M/V NORWEGIAN JEWEL, IMO NO. 9304045, Southern District of Texas;

    GLOBAL LEADER (Nippon Yusin Kaisha Line (NYK); Nustar Energy Services, Inc. v. M/V GLOBAL LEADER, in the Second Maritime

    Court of Panama, case number 115219-2014.

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  • -6-

    6. The Clerk of the Court shall take whatever steps are necessary to expeditiously effect the

    transfer of the Chapter 11 Cases directly to the United States District Court for the Southern District of

    New York.

    7. The Bankruptcy Court shall retain jurisdiction to hear and determine all matters arising

    from or related to the implementation, interpretation and/or enforcement of the Settlement Agreement and

    this Order.

    Dated: Hon. Alan H.W. Shiff United States Bankruptcy Judge

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