Shuttered oil refinery files for bankruptcy after DOJ complaint

A shuttered oil refinery in the U.S. Virgin Islands filed for bankruptcy Monday evening, the same week the Justice Department announced civil action against the facility, The Washington Post reported.

The Limetree Bay refinery, which had been inactive for several years, resumed operations in February due to several steps taken by the outgoing Trump administration to ease the path to reopening.

Later in the year, the Environmental Protection Agency ordered it shut down, citing reports of major environmental and human risks to the local residential areas. In June, the facility announced it would stay closed indefinitely, citing lack of capital.

“We are extremely grateful to our investors, employees and business partners for standing by us through the restart process and these uncertain times,” Limetree Bay CEO Jeff Rinker said in a statement Monday. “Severe financial and regulatory constraints have left us no choice but to pursue this path, after careful consideration of all alternatives. The Chapter 11 process provides Limetree with the clearest path to maximize the value of our estate for our stakeholders while safely preparing the refinery for an extended shutdown.”

Earlier Monday, the Justice Department announced a federal complaint against the refinery, saying it continued to pose a threat to the local environment and population. The company agreed that any resumption of operations would be accompanied by precautions like installing hydrogen sulfide and sulfur dioxide air monitors.

The refinery is the defendant in several separate class-action lawsuits from residents of the island of St. Croix, who claim the oil vapor released by the facility has been detrimental to their health. The Chapter 11 filing could potentially prevent payouts to the plaintiffs in those complaints.

“The business tool of corporate bankruptcy does not usually benefit normal regular people who have claims,” Russell Pate, an attorney for several of the claimants, told the Post, noting creditors and shareholders are typically paid before class-action plaintiffs in such circumstances.

The Hill has reached out to the Justice Department for comment.