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After fire, Philadelphia refinery paid executives $4,591,500 in bonuses while hundreds were laid off

Andrew Maykuth, The Philadelphia Inquirer on

Published in Business News

In addition, Mark Brandon, vice president of strategy and development, received a $250,000 retention bonus, Stephanie Eggert, vice president of business planning, got $150,000, and Bradley Galante, vice president of supply and trading, received $150,000.

The executives also received payments for unused vacation time ranging from $27,000 to $65,000 on June 27, as did the remainder of the workforce after they were told the refinery was going to shut down permanently.

The refinery also paid "spot bonuses" of $75,000 to Celiberti and $50,000 to Lagreca on June 21, the day of the fire and explosion that shut down the refinery.

"While the refinery was still on fire, they're not thinking about starting the refinery right then, they're already thinking about shutting it down, that's what it's telling me," said O'Callaghan, who was among the more than 500 unionized workers who lost their jobs.

Rather than paying severance bonuses to unionized workers, PES in August agreed to set up a "transition fund" of $2.8 million to be divided equally among union workers who were not among the 83 employees retained as "caretakers."

The company's board of directors did not receive bonuses, but the company also made a $772,5000 initial payment for annual consulting duties to chairman Mark Cox on July 2.

U.S. Bankruptcy Judge Kevin Gross, who is supervising the refinery's bankruptcy, is also overseeing the restructuring of Hahnemann University Hospital, which announced its closure the same day as the refinery.

The 1,300-acre PES refinery complex shut down operations in July, but is still undergoing cleanup following the fire and explosions. Several federal agencies are investigating the cause of the fire, which slightly injured five refinery workers, none requiring hospitalization.

 

The complex, which is actually two historically separate refineries that were merged under the common ownership of Sunoco Inc., has struggled financially for a decade. Sunoco transferred much of its interest in 2012 to the Carlyle Group, a private equity investor, to form Philadelphia Energy Solutions. PES went through bankruptcy last year, and is now owned primarily by its former creditors, Credit Suisse Asset Management and Bardin Hill Investment Partners, according to the bankruptcy filing.

The company announced last month it has launched a "structured process" to solicit interest in acquiring some or all of the refinery assets. PES has retained PJT Partners as its investment banker to assist with this process.

Several potential bidders, including retired PES chief executive Phil Rinaldi, have said they are interested in bidding on the refinery. But PES, in an Aug. 29 statement, said it is evaluating a full range of options to maximize the refinery's value, including rebuilding and restarting the complex.

"At this time, it is far too early in the strategic process for PES or others to be making any public statements regarding the future direction of PES and the refinery complex," the company said.

(c)2019 The Philadelphia Inquirer

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