Chemical maker TPC Group files pre-arranged bankruptcy

FILE PHOTO: A process tower flies through the air after exploding at the TPC Group Petrochemical Plant in Port Neches

(Corrects name of company to TPC from TCP in headline and first paragraph)

HOUSTON (Reuters) -Texas petrochemical producer TPC Group filed for bankruptcy protection on Wednesday with a plan to hand over control to its lenders, after struggling under costs and legal claims from a 2019 fire.

The Houston-based firm filed for Chapter 11 in U.S. Bankruptcy Court for the District of Delaware with plans to eliminate $950 million of $1.3 billion in secured debt and shed liabilities from an explosion and fire at its plant in Port Neches, Texas. The company had negotiated and agreed the deal with debt-holders.

The largest North American processor of the petrochemicals butane and butadiene, plans to continue operations while it restructures, said Chief Executive Edward J. Dineen in a statement. The chemicals are used in manufacturing of plastics, tires and gasoline.

The company faces federal and state investigations over the Port Neches fire, and is in negotiations with a committee representing some 7,000 claims for property damage, business interruption and personal injury, according to court filings.

The fire was “a critical event leading to” the bankruptcy, according to a court filing. The pandemic later cut into its business, cutting 2020 revenue nearly in half compared to 2019, and a winter storm in 2021 also hit sales, it said.

The case is U.S. Bankruptcy Court, District of Delaware, No. 22-10493.

(Reporting by Gary McWilliams; Editing by Lincoln Feast)