UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT PURSUANT TO
SECTION
13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): September 26,
2017
Blue Dolphin Energy Company
(Exact
name of registrant as specified in its charter)
|
Delaware
(State or Other Jurisdiction
of Incorporation)
|
0-15905
(Commission File Number)
|
73-1268729
(IRS Employer Identification
No.)
|
801 Travis Street, Suite 2100
Houston, Texas 77002
(Address
of principal executive office and zip code)
(713) 568-4725
(Registrant’s
telephone number, including area code)
(Not Applicable)
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2
below):
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01
Entry
into a Material Definitive Agreement.
As
previously disclosed, on August 11, 2017, Lazarus Energy, LLC
(“LE”), a wholly owned subsidiary of Blue Dolphin
Energy Company (“Blue Dolphin”), received an
unfavorable outcome in the arbitration proceedings between LE and
GEL Tex Marketing, LLC (“GEL”), an affiliate of Genesis
Energy, LP. The arbitrator’s final award (the “Final
Award”) denied all of LE’s claims against GEL and
granted substantially all of the relief requested by GEL in its
counterclaims. Among other matters, the Final Award awarded
damages, legal and administrative fees, and court costs payable to
GEL by LE in the aggregate sum of approximately $31.3
million.
A
hearing on confirmation of the Final Award was scheduled to occur
on September 18, 2017 in state district court in Harris County,
Texas. Prior to the scheduled hearing, LE and GEL jointly notified
the court that the hearing would be continued for a period of no
more than 90 days after September 18, 2017 (the “Continuance
Period”), in order to facilitate settlement discussions
between the parties.
On
September 26, 2017, LE and Blue Dolphin, together with their
affiliates Lazarus Energy Holdings, LLC and Jonathan Carroll
(collectively, the “Lazarus Parties”), entered into a
Letter Agreement with GEL, effective September 18, 2017 (the
“Letter Agreement”), confirming the parties’
agreement to the continuation of the confirmation hearing during
the Continuance Period, subject to the terms of the Letter
Agreement. The Letter Agreement includes the following terms, among
others:
●
The Lazarus Parties
and GEL agreed to work together in good faith during the
Continuance Period to negotiate and document the terms of a
settlement and payment structure to resolve all of their disputes
and obligations, including those related to and arising from the
Final Award.
●
LE agreed to pay
GEL approximately $3.6 million, consisting of a cash payment and
disbursement of certain funds held in the court’s registry,
which amount will be applied to reduce the balance of the Final
Award.
●
The Lazarus Parties
waived all objections to confirmation of the Final Award, but GEL
agreed that it would not take any action to confirm, enforce,
collect, execute upon, perfect or exercise any remedies regarding
that waiver or the Final Award prior to the earlier of (1) the
expiration of the Continuance Period without the parties’
agreeing to a settlement and (2) termination of the Letter
Agreement.
●
The Lazarus Parties
agreed that, without GEL’s consent, they would not, subject
to certain agreed-upon exceptions, (1) incur debt, (2) create liens
on their assets, (3) sell, lease or otherwise transfer assets
outside the ordinary course of business, (4) engage in transactions
with affiliates or amend the terms of existing affiliate
transactions, (5) become party to bankruptcy, reorganization,
liquidation or similar proceedings, (6) make investments in,
acquire material assets of or merge or consolidate with any other
entity, (7) allow changes to their equity ownership structures, or
(8) amend their debt instruments or organizational
documents.
●
GEL may terminate
the Letter Agreement on the 45th day of the
Continuance Period, or November 1, 2017, if it determines, in its
sole discretion, that settlement discussions between the parties
are not advancing to an acceptable resolution.
Blue
Dolphin can provide no assurance as to whether negotiations with
GEL will result in a settlement or as to the potential terms of any
such settlement.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
|
|
Blue
Dolphin Energy Company
|
|
|
|
|
|
|
|
|
Date:
September 29, 2017
|
By:
|
/s/ JONATHAN P.
CARROLL
|
|
|
|
|
Jonathan
P. Carroll
|
|
|
|
|
Chief
Executive Officer, President,
Assistant
Treasurer and Secretary
(Principal
Executive Officer)
|
|