-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 REW9cCvxujF3FIhFAcU/vOGSG+oU7n9PGNzMXx154qGUeH3qZBieJmUGyoAUKqST
 niIYmK5UGsl6qYa9J7VudA==

<SEC-DOCUMENT>0001193125-06-035744.txt : 20061027
<SEC-HEADER>0001193125-06-035744.hdr.sgml : 20061027
<ACCEPTANCE-DATETIME>20060221155608
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-06-035744
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060221

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			STAR GAS PARTNERS LP
		CENTRAL INDEX KEY:			0001002590
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RETAIL STORES, NEC [5990]
		IRS NUMBER:				061437793
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2187 ATLANTIC ST
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06902
		BUSINESS PHONE:		2033287300

	MAIL ADDRESS:	
		STREET 1:		2187 ATLANTIC STREET
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06902
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML><HEAD>
<TITLE>Response letter</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">P<SMALL>HILLIPS</SMALL> N<SMALL>IZER</SMALL> LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">666 F<SMALL>IFTH</SMALL> A<SMALL>VENUE</SMALL> </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">N<SMALL>EW</SMALL> Y<SMALL>ORK</SMALL>,
N<SMALL>EW</SMALL> Y<SMALL>ORK</SMALL> 10103 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">February&nbsp;21, 2006 </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Via Edgar and Facsimile </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman"
SIZE="2">Securities and Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">450 Fifth Street, N.W. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Washington, D.C. 20549 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Attn:</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">William Thompson </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">Mail Stop 3561 </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>Re:</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Star Gas Partners, L.P. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"><B>Registration Statement
on Form S-3 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"><B>Filed January&nbsp;18, 2006 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
FACE="Times New Roman" SIZE="2"><B>File No.&nbsp;333-131098 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"><B>Form 10-K for the Year Ended September&nbsp;30, 2005 </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"><B>Filed December&nbsp;13, 2005 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"><B>File
No.&nbsp;1-14129 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Dear Mr.&nbsp;Thompson: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">We refer to the Staff&#146;s comment letter dated February&nbsp;14, 2006 on the above-referenced registration statement on Form S-3 and Annual Report on Form 10-K of Star Gas Partners, L.P., a Delaware limited partnership (&#147;Star Gas
Partners&#148; or the &#147;Partnership&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Prior to filing amendments to the Form S-3 and Form 10-K to respond to the Staff&#146;s
comments, we would like to discuss with you the Partnership&#146;s proposed responses to comments 9 and 12, which are set forth below. I will call you today to arrange a mutually convenient time at which the Partnership&#146;s controller and myself
can discuss these comments with you. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Consolidated Statements of Operations, page F-5 </U></B></FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>9.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Please revise to show the amount of net income (loss) allocated to each ownership class and to disclose net income (loss) on a per unit basis for each ownership class. Please
also revise your disclosure in Note 19 to the financial statements as appropriate. In addition, please disclose how net income (loss) is allocated to each ownership class in the notes to the financial statements. Please refer to SAB Topic 4:F.
</B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2">Guidance in SAB Topic 4: F. requires that the equity section of the partnership&#146;s balance sheet distinguish between
amounts ascribed to each of the ownership classes, equity of the general partner and the limited partners. In addition it requires that &#147;<I>income statements be presented in a manner which clearly shows the aggregate amount of net</I> </FONT>
</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%">
<FONT FACE="Times New Roman" SIZE="2"><I>income (loss) allocated to the general partners and the aggregate amount to the limited partners</I>.&#148; We believe that SAB Topic 4:F. requires
aggregation of amounts for two classes (i)&nbsp;general partners and (ii)&nbsp;limited partners. A disaggregating of limited partners units into sub-classes is not contemplated nor do we believe it is the intent of SAB Topic 4:F. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2">Net income allocated to the limited partner&#146;s sub classes is calculated and disclosed in the Statement of Partnership&#146;s Capital (page F-7).
Income (loss) on a per unit basis for the sub-classes of limited partner units is the same amount currently disclosed for all limited partnership units. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Note 10- Long-Term Debt and Bank Facility Borrowings, page F-21 </U></B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>12.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>We note that the revolving credit facility imposes certain restrictions on the ability of the heating oil segment to pay distributions. Please tell us the nature of the
restrictions and provide us your calculation of restricted net assets of the heating oil segment as of the most recent balance sheet date. If restricted net assets exceed 25% of consolidated net assets as of the end of the most recent year please
disclose the information required by Rule 4-08(c)(3) of Regulation S-X and file Schedule I required by Rule 5-04 of Regulation S-X. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The
Credit Agreement does not contain any requirements that the heating oil segment (referred to herein as &#147;Petro&#148;) maintain a specified level of net assets. However, the Credit Agreement does contain restrictions on the payment of dividends
by Petro to Star Gas, the most significant of which are as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(i) Unless after giving pro forma effect to any distribution either
(a)&nbsp;availability would be no less than $25 million during the 12 month period preceding the distribution or (b)&nbsp;the fixed charge coverage ratio would be no less than 1.25 to 1, Petro could not distribute amounts necessary to pay interest
on our senior notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(ii) Unless after giving pro forma effect to any distribution both (a)&nbsp;availability would be no less than $40
million during the 12 month period preceding the distribution and (b)&nbsp;the fixed charge coverage ratio under the indenture governing our senior notes would be no less than 1.75 to 1, Petro could not distribute amounts to make distributions to
our unit holders or, except as noted in the next sentence, for any other purpose. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Notwithstanding the above, so long as there is no event of default there
is no restriction on (i)&nbsp;distributions necessary to redeem our senior notes due to the sale of our propane segment or (ii)&nbsp;up to $10 million in distributions necessary to pay overhead expenses. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">As of September&nbsp;30, 2005, pro forma availability was in excess $25 million during the preceding 12- month period, so that there was no restriction on dividends
necessary to pay interest on our senior notes. Petro was, however, restricted from other distributions since while pro forma availability during the preceding 12 months was in excess of $40 million, the fixed charge </FONT>
</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">coverage ratio under the Credit Facility was only .56 to 1. As of December&nbsp;31, 2005, availability was in excess $40 million during the preceding 12-
month period and the fixed charge coverage ratio under the Credit Facility was 1.26 to 1, so that there were no restrictions distributions under the Credit Facility. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Please see draft disclosure (Exhibit 12) in accordance with Rule 4.08(e)(3)(i), and (ii)&nbsp;of Regulation S-X, which will be inserted into note 10 of the financial statements included in Form 10-K for the Year Ended
September&nbsp;30, 2005. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Star Gas Partners effectively owns over 99% of Petro. Star Gas Partners does not engage in any revenue generating activity. It is
essentially the public entity conduit for Petro. Star Gas Partners incurs legal and professional expenses and overhead costs in connection with its public entity status. In addition, Star Gas Partners is the issuer of the outstanding public debt
represented by the 10.25% senior notes (&#147;Senior Notes&#148;) and pays the semiannual interest. These costs are the only costs Star Gas Partners incurs and each of these costs are specifically outlined in the revised notes to the financial
statements, (note 10). Star Gas Partners has no assets other than some prepaid legal and professional fees and a deminimus amount of cash on hand at any point in time. The footnote disclosure together with the segment disclosure (note 6 to the
financial statements) makes abundantly clear the nature and amount of cash flow restrictions on Star Gas Partners as a result of Petro&#146;s credit facility. Filing Schedule I, as per Rule 5-04 of Regulation S-X would be a time consuming and
expensive project that would require a separate audit of Schedule I from our accounting firm. We believe that the end result would provide no more relevant information to the financial statement reader than the current disclosure. As a result, we
respectfully request that the Staff not require that Star Gas Partners amend its fiscal 2005 Form 10-K to include schedule I. Star Gas Partners will include schedule I in future annual reports to the extent that Rule 5.04 would require it to do so.
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Very truly yours,</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">/s/ Brian Brodrick</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Brian Brodrick</FONT></P></TD></TR>
</TABLE></DIV> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">cc:</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Star Gas Partners, L.P. </FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>EXHIBIT (12) </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><I>&#147;&#133;&#133;.(as defined in the credit agreement) was only .56 to 1.&#148;</I> As a result of not maintaining the adequate fixed charge coverage ratio as of September&nbsp;30, 2005 the Partnership&#146;s
subsidiary Petro Holdings, Inc., is restricted from making any distributions to the Partnership except ,(due to its availability at September&nbsp;30, 2005),for (i)&nbsp;amounts necessary to pay interest on the 10.25% Senior Notes, (ii)&nbsp;amounts
necessary to redeem the 10.25% Senior Notes with Net Proceeds, and (iii)&nbsp;up to $10 million to pay overhead expenses at the Partnership level. </FONT></P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
