SemGroup's $3.2 billion failure shocks backers

NEW YORK (Reuters) - The dramatic collapse of energy trader SemGroup LP shocked the privately held firm's backers who until last week had little idea of the extent of the oil trading losses that sank it, sources said this week. As late as June a banker at Bank of America (BAC.N), one of SemGroup's main lenders, described the fast-growing company as one of his best clients, two sources said this week. The Tulsa, Oklahoma-based company filed for bankruptcy on Tuesday after suffering $3.2 billion in losses on energy futures and derivatives trades that SemGroup says were designed to protect its physical oil trading business. SemGroup creditors said this week they had little idea of the extent of the firm's losses and were surprised by the much larger than expected size of the hedging program. Some creditors suggested on Wednesday... [read full story]