September 9, 2019 / 6:48 PM / a month ago

Bankrupt Philadelphia refiner paid executives millions in bonuses just after fire: documents

NEW YORK (Reuters) - Executives of the Philadelphia Energy Solutions oil refinery were paid roughly $4.5 million in retention bonuses after a summer fire that led to the plant’s closure and before the company filed for bankruptcy a few weeks later, court documents show.

FILE PHOTO: The Philadelphia Energy Solutions plant refinery is seen in Philadelphia, Pennsylvania, U.S., August 21, 2019. REUTERS/Mark Makela/File Photo

PES announced plans to permanently shut its refinery following the June 21 explosive blaze and immediately began laying off many of its 1,100 employees without severance pay or health insurance coverage.

The payments were made on July 5, about two weeks before PES filed for Chapter 11 bankruptcy, and while it was in the process of closing its 335,000 barrel-per-day refinery.

Attorneys for the owners of PES were not immediately available for comment. Reuters could not immediately reach officials from PES.

Chief Executive Officer Mark Smith received a $1.545 million retention bonus, the largest sum handed out to company executives, according to documents filed on Friday with the Bankruptcy Court for the District of Delaware.

Attorney John McShane received $875,500, Chief Financial Officer Rachel Celiberti was given $721,000 and deputy staff attorney Anthony Lagreca made $450,000. Refinery manager Daniel Statile, who had been on the job since March, was paid $325,000.

Additional spot bonuses, including a $75,000 payout for Celiberti and $50,000 for Lagreca, were made on the day of the June blaze.

The company’s board of directors was not awarded bonuses, but there were other payouts, including a $772,5000 initial payment for annual consulting duties to Director Mark Cox on July 2.

The last crude distillation unit at the PES refinery, the oldest and largest on the East Coast, was taken offline in late July.

Last month, after hundreds of workers had already been dismissed, most of the refinery’s 640 union members of the plant were also let go.

Under an agreement between the company and the local steelworkers union, some of the union workers were to receive a two-week severance while others will receive no additional pay.

None of the dismissed employees will receive continued medical benefits through the Consolidated Omnibus Budget Reconciliation Act (COBRA) because PES terminated its group health insurance plan, according to documents reviewed by Reuters.

Reporting by Laila Kearney in New York and Tom Hals in Wilmington, Del.; Editing by Matthew Lewis

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