J. Aron Gains Another SemGroup Victory

October 26, 2010

On October 26, United States District Court Judge Sue Robinson of the United States District Court for the District of Delaware ruled in favor of Cleary Gottlieb client J. Aron & Company, the commodities trading affiliate of Goldman Sachs & Co., rejecting attempts to appeal the bankruptcy court’s April 9, 2010 denial of motions to dismiss or abstain from hearing J. Aron’s declaratory judgment action (the “Tender Adversary”) against SemGroup and 60 or so of its oil suppliers (the “Producers.”). The District Court granted J. Aron’s motion to dismiss the Producers’ appeals.

J. Aron brought its Tender Adversary in January 2009 to litigate in a single action multiple competing claims to a $430 million receivable res arising from J. Aron’s trading relationship with SemGroup. The Producers sought for the Bankruptcy Court to yield its jurisdiction over this dispute to actions they brought in Oklahoma, Kansas and Texas state courts. As a result of the District Court’s ruling, the SemGroup Bankruptcy Court – which had previously ruled in favor of J. Aron’s position with respect to certain initial threshold questions of law relating to the novel statutory trust and lien claims asserted by the Producers – continues to preside over the ultimate resolution of the Tender Adversary and other related disputes.