Ruby Pipeline creditors hit hundreds of millions in cash transfers to owners (NYSE:KMI)

A lawyer for creditors of Ruby Pipeline on Monday questioned the company’s approach to its Chapter 11 bankruptcy process, particularly criticizing hundreds of millions of dollars in cash transfers made to the company’s owners in recent years.

According to Reuters, the creditors’ attorney said during the hearing that his team is concerned that Ruby Pipeline’s owners, Kinder Morgan (NYSE:KMI) and Pembina Pipeline (NYSE:PBA), will try to maintain control over the company, and said his team would support a plan in which unsecured creditors take over the company in exchange for releasing the debt they hold.

The creditors’ attorney also said the pipeline’s equity value may be worth less than the amount the noteholders are owed, meaning Kinder Morgan and Pembina should not be allowed to maintain control of the company.

Ruby Pipeline’s lawyers said the company does not yet know the value of its assets or whether it will seek a sale, a standalone reorganization or some combination.

The company, which owns a natural gas pipeline that runs from Wyoming to Oregon, filed for Chapter 11 protection last week after it was unable to repay a $475M bond due on April 1.