A Texas judge said he’d rule on bankruptcy protection for a Hess subsidiary in early November, potentially opening the door to former employees in the U.S. Virgin Islands seeking damages for asbestos exposure.
Judge Marvin Isgur, of the Southern District of Texas bankruptcy court, said at Monday’s hearing he’d take final filings from HONX, a Hess subsidiary, and a group of its creditors.
The creditors have asked the court to either void Chapter 11 bankruptcy for HONX or convert it to Chapter 7. Either way, the former owners of St. Croix’s long-troubled oil refinery would have to answer hundreds of lawsuits from Virgin Islanders allegedly hurt by the oil plant’s toxins, according to the court records.
The HONX bankruptcy, the creditors wrote, is protecting $37 billion from potential exposure to the asbestos suits. The filing claimed Hess settled out of court approximately 1,100 asbestos suits over the last 23 years.
Hess is especially scared of the suit going to trial in the USVI because of a 2021 change in laws, allowing older or sick people to have their cases expedited, the creditors claimed.
Legal filings in the case allege nearly 60 years of environmental and social ills caused by the refinery, claiming while the plant owners manipulated local workers and government officials, they also poisoned St. Croix.
Hess ran the refinery on St. Croix’s south shore from 1965 to 1998, allegedly exposing a generation of Crucians to unchecked toxins in their workplace. Hess sold the refinery to Hovensa, which in turn sold it to Limetree Bay. Who exactly owns the massive refinery now has been a matter of debate since it was sold at bankruptcy auction in December 2021 but Port Hamilton Refining and Transportation claims to be the sole owner.
Some residents and would-be developers have called for the refinery to be permanently closed and dismantled. Some claim to have been sickened by fumes from the plant. Others have asked the Environmental Protection Agency to declare the sight hazardous and designated a superfund area. The EPA, however, has been hampered in its monitoring of such matters by recent U.S. Supreme Court rulings. In May 2021, oil spray from the plant coated homes downwind.
The recent court filing dug into the history of oil refining on St. Croix, painting a picture of oil barrens taking advantage of USVI tax breaks and plowing over zoning regulations. Refinery owners were able to sidestep $6.2 billion in expenses by 1992, the filing alleges. USVI leaders demanded Hess hire 75 percent locally, making the refinery an essential part of the territorial economy. But refinery owners leveraged this influence — employing roughly 15 percent of the local workforce — to extract even more favorable tax breaks, the court filing claimed.
