SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 3)*

Blueknight Energy Partners, L.P.

(Name of Issuer)

Common Units

(Title of Class of Securities)

09625U109

(CUSIP Number)

Solus Alternative Asset Management LP

430 Park Avenue, 9th Floor

New York, New York 10022

Attention: Colette Klisivitch,

Chief Compliance Officer

With a copy to:

Herrick, Feinstein LLP

2 Park Avenue

New York, NY 10016

Attention: Patrick D. Sweeney, Esq.

(Name, Address and Telephone Number of Person Authorized to

Receive Notices and Communications)

March 1, 2011

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

CUSIP No. 09625U109
1.	Name of Reporting Persons: Solus Alternative Asset Management LP
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x
3.	SEC Use Only
4.	Source of Funds:  AF
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially by Owned by Each Reporting Person With	1)	Sole Voting Power:   0
	2)	Shared Voting Power: 1,570,000 (1)
	3)	Sole Dispositive Power: 0
	4)	Shared Dispositive Power: 1,570,000 (1)
11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 1,570,000 (1)
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
13.	Percent of Class Represented by Amount in Row (11): 7.2% (2)
14.	Type of Reporting Person (See Instructions): IA

(1) These Common Units are directly owned by certain entities under management by Solus Alternative Asset Management LP (“Solus”).  Solus may be deemed the beneficial owner of such Common Units on the basis of that management relationship.

(2) Based upon a total of 21,727,724 common units outstanding as of November 5, 2010 as reported on the Issuer’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010.

CUSIP No. 09625U109
15.	Name of Reporting Persons: Solus GP LLC
16.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x
17.	SEC Use Only
18.	Source of Funds:  AF
19.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
20.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially By Owned by Each Reporting Person With	5)	Sole Voting Power:   0
	6)	Shared Voting Power: 1,570,000 (1)
	7)	Sole Dispositive Power: 0
	8)	Shared Dispositive Power: 1,570,000 (1)
25.	Aggregate Amount Beneficially Owned by Each Reporting Person: 1,570,000 (1)
26.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
27.	Percent of Class Represented by Amount in Row (11): 7.2% (2)
28.	Type of Reporting Person (See Instructions): OO

(1) These Common Units are directly owned by certain entities under management by Solus Alternative Asset Management LP (“Solus”).  Solus may be deemed the beneficial owner of such Common Units on the basis of that management relationship.  Solus GP LLC, as the general partner of Solus may also be deemed the beneficial owner of such Common Units.

(2) Based upon a total of 21,727,724 common units outstanding as of November 5, 2010 as reported on the Issuer’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010.

CUSIP No. 09625U109
29.	Name of Reporting Persons: Christopher Pucillo
30.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x
31.	SEC Use Only
32.	Source of Funds:  AF
33.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
34.	Citizenship or Place of Organization United States of America

Number of Shares Beneficially by Owned by Each ReportingPerson With	9)	Sole Voting Power:   0
	10)	Shared Voting Power: 1,570,000 (1)
	11)	Sole Dispositive Power: 0
	12)	Shared Dispositive Power: 1,570,000 (1)
39.	Aggregate Amount Beneficially Owned by Each Reporting Person: 1,570,000 (1)
40.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):o
41.	Percent of Class Represented by Amount in Row (11): 7.2% (2)
42.	Type of Reporting Person (See Instructions): IN

(1) These Common Units are directly owned by certain entities under management by Solus Alternative Asset Management LP (“Solus”).  Solus may be deemed the beneficial owner of such Common Units on the basis of that management relationship.  Solus GP LLC (“Solus GP”), as the general partner of Solus, and Christopher Pucillo, as the managing member of Solus GP may also each be deemed the beneficial owner of such Common Units.

(2) Based upon a total of 21,727,724 common units outstanding as of November 5, 2010 as reported on the Issuer’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010.

This Amendment No. 3 (this “Amendment”) reflects changes to the information in the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on January 12, 2011 by Solus Alternative Asset  Management LP (“Solus”) a Delaware limited partnership registered with the SEC, Solus GP LLC (“Solus GP”), a Delaware limited liability company, which serves as the general partner to Solus, and Christopher Pucillo (“Pucillo”, and together with Solus and Solus GP, the “Reporting Persons”), the managing member of Solus GP, relating to the Common Units of Blueknight Energy Partners, L.P. (the “Issuer”), as amended and/or supplemented by Amendment No. 1 to the Schedule 13D filed on Janaury 20, 2011 by the Reporting Persons with the SEC, and as further amended and/or supplemented by Amendment No. 2 to Schedule 13D filed on February 2, 2011 by the Reporting Persons with the SEC (as amended, the "Schedule 13D").  Each capitalized term used and not defined in this Amendment shall have the meaning assigned to such term in the Schedule 13D.  Except as otherwise provided herein, each item of the Schedule 13D remains unchanged.

Item 4.  Purpose of Transaction.

Item 4 of the Schedule 13D is hereby amended by deleting the first sentence of the fifth paragraph thereof.

Item 4 of the Schedule 13D is hereby further amended by inserting the following after the fifth paragraph thereof:

As described in Item 6 below, effective as of March 1, 2011, Solus entered into a Non-Disclosure Agreement (the “NDA”) with the Issuer and the General Partner, a copy of which is filed as Exhibit 99.6 hereto and is incorporated herein by reference. The NDA was entered into in anticipation of a meeting to be held on March 3, 2011 among the Issuer, General Partner, Solus and other major investors of the Issuer, to discuss the refinancing and recapitalization of Blueknight (the “Refinancing Meeting”).  Pursuant to the NDA, Solus agreed, among other things, to maintain confidential certain non-public information pertaining to the Issuer and its affiliates made available to Solus. A summary of the NDA is set forth in Item 6 below and is incorporated herein by reference.

The Refinancing Meeting took place on March 3, 2011 as scheduled.

Item 6.  Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Item 6 of the Schedule 13D is hereby amended by inserting the following therein:

In anticipation of the Refinancing Meeting, effective as of March 1, 2011, Solus entered into the NDA with Issuer and the General Partner, pursuant to which Solus agreed, among other things, to maintain confidential certain non-public information pertaining to the Issuer and its affiliates made available to Solus.

In addition, Solus agreed that for a period of twenty (20) days from the date of the Refinancing Meeting, unless Issuer specifically consents in writing, Solus and its controlled affiliates will not, directly or indirectly, effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way assist any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, any sale (including any short-sale) or acquisition of any equity securities (or beneficial ownership thereof) or acquisition of assets of the Issuer or its controlled affiliates.

Item 7.  Material to Be Filed as Exhibits

Exhibit No	Description
99.1	Joint Filing Agreement, dated as of January 12, 2011, by and among Solus Alternative Asset Management LP, Solus GP LLC and Christopher Pucillo (incorporated herein by reference to Exhibit 99.1 to the Schedule 13D filed on January 12, 2011 by the Reporting Persons with the SEC)
99.2	Letter to Blueknight Energy Partners, L.P., dated January 12, 2011 (incorporated herein by reference to Exhibit 99.2 to the Schedule 13D filed on January 12, 2011 by the Reporting Persons with the SEC)
99.3	Letter to Solus Alternative Asset Management LP, dated January 18, 2011 (incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on January 18, 2011 by the Issuer with the SEC)
99.4	Letter to Blueknight Energy Partners, L.P., dated January 19, 2011 (incorporated herein by reference to Exhibit 99.4 to the Schedule 13D filed on January 20, 2011 by the Reporting Persons with the SEC)
99.5	Letter to Blueknight Energy Partners, L.P., dated February 2, 2011 (incorporated herein by reference to Exhibit 99.5 to the Schedule 13D filed on February 2, 2011 by the Reporting Persons with the SEC)
99.6	Non-Disclosure Agreement, effective as of March 1, 2011, among Blueknight Energy Partners, L.P., Blueknight Energy Parnters G.P., L.L.C. and Solus Alternative Asset Management LP.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

In accordance with Rule 13d-4 of the Securities Exchange Act of 1934, each of the persons filing this statement expressly disclaim beneficial ownership of the securities covered by this statement and the filing of this report shall not be construed as an admissions by such persons that they are the beneficial owners of such securities.

Dated:  March 4, 2011

SOLUS ALTERNATIVE ASSET MANAGEMENT LP

By: SOLUS GP LLC

/s/ Christopher Pucillo

Christopher Pucillo

Managing Member

SOLUS GP LLC

/s/ Christopher Pucillo

Christopher Pucillo

Managing Member

/s/ Christopher Pucillo

CHRISTOPHER PUCILLO

EX-99.6

EXHIBIT 99.6

NON-DISCLOSURE AGREEMENT

1.           Introduction.  This Non-Disclosure Agreement (this “Agreement”), which shall be effective for all purposes as of March 1, 2011, is entered into among Blueknight Energy Partners, L.P., a Delaware limited partnership (“Blueknight”), and Blueknight Energy Partners G.P., L.L.C., a Delaware limited liability company (the “General Partner”), on the one hand, and Solus Alternative Asset Management LP (“Receiving Party), on the other hand.  From time to time, Blueknight and the General Partner may (but shall not be obligated to) disclose to Receiving Party certain “non-public” information relating to Blueknight, the General Partner, their respective Affiliates and their respective businesses.  Receiving Party acknowledges that, in making any such disclosures, Blueknight is relying on an exception to the disclosure requirements of Regulation FD requiring the recipients of such non-public information, which is also Material, to agree to keep such information confidential.  In consideration for the receipt of such non-public information, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Blueknight, the General Partner and Receiving Party agree as follows:

2.           Definitions.

(a)           “Affiliate” has the meaning provided in Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

(b)           “Blueknight Non-public Information” shall mean information pertaining to Blueknight, the General Partner and/or their respective Affiliates that has not been Publicly Disclosed and that Blueknight or the General Partner discloses to Receiving Party, including, without limitation, the existence of the Refinancing Meeting (as defined below) and attendance by Receiving Party or any other limited partner of Blueknight at such meeting and all information regarding the refinancing disclosed, discussed or made available to Receiving Party in the Refinancing Meeting.  The term Blueknight Non-public Information shall not include, however, information which (i) is or becomes generally available to the public other than as a result of disclosure by Receiving Party in breach of this Agreement, (ii) was or becomes available to Receiving Party on a non-confidential basis prior to or after its disclosure by Blueknight or the General Partner from a person, other than Blueknight or the General Partner, who is not known by Receiving Party to be bound by an obligation to Blueknight or the General Partner to keep such information confidential or (iii) is developed independently by Receiving Party without use of Blueknight Non-public Information and without violating any of the provisions of this Agreement.

(c)           “Group” has the meaning provided such term in Blueknight’s partnership agreement.

(d)           “Material” shall have the meaning given such term under applicable federal and state securities laws, regulations, and interpretations thereof.

(e)           “Publicly Disclosed” shall mean public disclosure by Blueknight of the information in question, either via the filing of appropriate reports with the Securities and Exchange Commission, press release announcement, or other method of “public disclosure” within the meaning of applicable federal and state securities laws, regulations, and interpretations thereof.

3.           Obligation to Maintain Confidentiality.  Receiving Party shall (i) keep and maintain any Material Blueknight Non-public Information in strict confidence and (ii) not disclose to any other person that the Blueknight Non-public Information has been made available to Receiving Party, except, in each case, to the extent that Receiving Party is requested pursuant to, or required by, applicable law or regulation or by legal process (including by deposition, interrogatory, request for documents, subpoena, or similar process) to disclose any Blueknight Non-public Information.

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4.           Trading in Blueknight Securities; Refinancing Meeting.

(a)           Receiving Party hereby acknowledges that it is aware that the United States securities laws prohibit any person who has Material non-public information about a company from purchasing or selling securities of such company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities in reliance upon such information.

(b)           The parties agree that on March 3, 2011, representatives of the parties intend to meet with each other as well as certain other limited partners of Blueknight to discuss the refinancing and recapitalization of Blueknight (the “Refinancing Meeting”).  The parties agree that Receiving Party will not be considered part of a Group for purposes of Blueknight’s partnership agreement with the other limited partners in attendance at the Refinancing Meeting solely because of Receiving Party’s attendance at the Refinancing Meeting.  Furthermore, the parties agree that (i) at the Refinancing Meeting there may be discussion in the nature of offers to compromise the disputed claims made in filings with the Securities and Exchange Commission (including filings made on Schedule 13D), correspondence to the General Partner and Blueknight and/or statements made by Receiving Party or its representatives to the General Partner and Blueknight or their representatives and (ii) all conduct of, or oral statements made by, Blueknight, the General Partner, Receiving Party or their respective representatives at the Refinancing Meeting that concern prospective settlement of the disputed claims (other than such conduct or statements containing information which (a) is or becomes generally available to the public other than as a result of disclosure by the party receiving the information at the Refinancing Meeting in breach of this Agreement, (b) was or becomes available to the party receiving the information at the Refinancing Meeting on a non-confidential basis prior to or after its disclosure at the Refinancing Meeting from a person who is not known by the party receiving the information at the Refinancing Meeting to be bound by an obligation to the party disclosing such information at the Refinancing Meeting to keep such information confidential or (c) is developed independently without use of conduct or statements at the Refinancing Meeting that concern prospective settlement of the disputed claims and without violating any of the provisions of this Agreement) are inadmissible and may not be used in any subsequent proceeding under applicable federal or state rules of evidence.

(c)           Receiving Party agrees that for a period of twenty (20) days from the date of the Refinancing Meeting, unless Receiving Party has been specifically consented to in writing by Blueknight, Receiving Party and its Affiliates will not, directly or indirectly, effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way assist any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, any sale (including any short-sale) or acquisition of any equity securities (or beneficial ownership thereof) or acquisition of assets of Blueknight or any of its Affiliates.

(d)           On or before the twentieth (20th) day after the date of the Refinancing Meeting, Blueknight shall publicly disclose any Blueknight Non-public Information disclosed to Receiving Party at the Refinancing Meeting that Blueknight, in its good faith judgment, determines is Material non-public information under United States securities laws with respect to Blueknight or Blueknight’s securities.  Blueknight shall promptly notify Receiving Party after making such disclosure.

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5.           Miscellaneous.

(a)           Receiving Party acknowledges that none of Blueknight, the General Partner nor any of their respective representatives makes any representations or warranties, express or implied, as to the accuracy or completeness of any Blueknight Non-public Information, that none of Blueknight, the General Partner nor any of their respective representatives shall have any liability whatsoever to Receiving Party or any other person as a result of their use of any Blueknight Non-public Information or any errors therein or omissions therefrom and that Receiving Party shall assume full and exclusive responsibility for any conclusions derived from the Blueknight Non-public Information.

(b)           Receiving Party agrees that money damages would not be a sufficient remedy for any breach of this Agreement by it and that Blueknight and the General Partner shall each be entitled, without the requirement of posting a bond or other security, to seek specific performance and injunctive or other equitable relief as a remedy for any such breach.  Such remedy shall not be deemed to be the exclusive remedy for a breach of this Agreement, but shall be in addition to all other remedies available at law or in equity.  In the event of litigation relating to this Agreement, if a court of competent jurisdiction determines in a final judgment that a party has breached this Agreement, then such party shall be liable and pay to the non-breaching party the reasonable legal fees and expenses such non-breaching party has incurred in connection with such litigation, including any appeal therefrom.

(c)           This Agreement (other than Sections 4(a) and (b)) shall terminate upon the earlier to occur of (i) sixty (60) days from the date hereof and (ii) such time as Receiving Party is no longer in possession of Blueknight Non-public Information.  Sections 4(a) and (b) of this Agreement shall terminate upon the date that is ten (10) years from the date hereof.

(d)           This Agreement shall be subject to, and construed in accordance with, the laws of the State of New York (excluding its conflicts of laws rules) and applicable federal laws and regulations.  This Agreement contains the entire agreement and understanding among the parties concerning the subject matter hereof, and supersedes any prior agreements, written or oral, relating to the subject matter hereof.  This Agreement may be amended, modified or waived only by a separate writing executed by Blueknight and Receiving Party expressly so amending, modifying or waiving this Agreement.  This Agreement may not be transferred or assigned (by operation of law or otherwise) by Receiving Party without the prior written consent of Blueknight, and shall inure to the benefit of and be binding upon the parties hereto and their respective permitted successors and assigns.  This Agreement may be executed by facsimile and in any number of counterparts, each of such counterparts shall for all purposes be deemed an original and all such counterparts shall together constitute but one and the same instrument.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned parties have executed this Agreement effective as of the date first set forth above.

BLUEKNIGHT ENERGY PARTNERS, L.P.
By: Blueknight Energy Partners G.P., L.L.C.
By:	/s/ Alex Stallings
Name: Alex Stallings
Title: CFO/Secretary
BLUEKNIGHT ENERGY PARTNERS G.P., L.L.C.
By:	/s/ Alex Stallings
Name: Alex Stallings
Title: CFO/Secretary
SOLUS ALTERNATIVE ASSET MANAGEMENT LP
By:	/s/ Nicholas Signorile
Name: Nicholas Signorile
Title: COO/CFO

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