KMCO bought by Houston company Altivia

Sale of bankrupt firm responsible for 2019 blast at Crosby plant approved

KMCO LLC, the owner of a chemical plant in Crosby that exploded last year killing one worker and injuring dozens of others, was acquired by a Houston chemical company following KMCO’s recent bankruptcy filing.

Altivia Petrochemicals acquired KMCO’s assets for $25,000, plus an additional $623,000 in property taxes and assumption of millions of dollars in liabilities to KMCO’s creditors, according to court filings. The sale was approved by the bankruptcy court Friday.

Altivia said Monday that it would upgrade and expand KMCO’s manufacturing plant in Crosby where a huge chemical explosion occurred in April 2019. The $25 million project will upgrade safety and control systems and add two new chemical reactors, which Altivia estimates will begin production by the end of 2020.

“We have completed a detailed evaluation of these assets and are looking forward to starting production by year end,” said Michael Jusbasche, chief executive officer of Altivia, in a statement Monday.

The company will extend job offers to 22 KMCO employees, according to court filings. The facility in Crosby will employ 200 workers when fully operational, the company said.

In May, KMCO LLC filed for Chapter 7 bankruptcy, which leads to a liquidation of a company’s assets as opposed to Chapter 11, in which companies work with creditors to reorganize and restructure debt to continue operating the business. By opting for Chapter 7, KMCO bypassed what is usually a long process of negotiations with creditors.

“If there is a prebankruptcy deal in place to sell a business, then a Chapter 7 process potentially saves the estate millions in attorney’s fees and increases the likelihood of a distribution to creditors,” said Miriam Goott, an attorney at Walker & Patterson who represented KMCO through the bankruptcy process.

A host of lawsuits were

filed against KMCO following the explosion. Harris County, the state and several workers filed claims alleging injuries and environmental violations. US Fire Pump Company, a firefighting service and equipment company, sued for breach

of contract, alleging KMCO still owes it more than $1 million for helping put out the chemical plant fire.

However, Altivia did not assume responsibility for the lawsuits against KMCO related to injuries or environmental violations from the explosion.

The morning of the explosion, workers were making a batch of sulfurized isobutylene,

a highly flammable liquid gas. A gas leak due to an equipment failure caused the huge explosion, obliterating the building’s entrance, investigators found. Workers attempted to stop the chemical leak before the explosion, according to the Harris County Fire Marshal’s Office.

After the explosion, local officials issued a five-hour

shelter-in-place order for residents within 1 mile of the facility.

The KMCO facilities are on 160 acres east of Houston. The facility can manufacture products such as lubricant additives and fuel additives for the automotive and oil field industries.