Court Enters Order Finally Approving Sale Option Settlement Proposal

On November 21, 2012, the Court entered an Order finally approving the settlement between the Debtor and Halcon (“Order”), which constitutes the sale to Halcon of all of the Debtor's leases and assets, as is where is, for $10,000,000.  On or before December 12, 2012, the Debtor must file a Sale Motion setting forth the terms of the proposed sale to Halcon and indicating that such sale is subject to higher offers at a public hearing and auction.  The sale hearing has been scheduled for January 25, 2012 at 10:00a.m. in the Erie Bankruptcy Courtroom, U.S. Courthouse, 17 S. Park Row, Erie, PA 16501.  Responses to the Sale Motion shall be filed on or before December 28, 2012.

The Debtor’s advertisement of the sale will inform Potential Bidders that due diligence materials related to the Subject Interests are available for review.  Per the terms of the Order, any Potential Bidder is one who (i) has executed an appropriate confidentiality agreement and (ii) the Debtor or Broker reasonably believes is capable of submitting a Qualified Bidder Deposit of $1,000,000.  In order to be eligible to participate in the auction, each bidder must be determined to be a Qualified Bidder, which is a Potential Bidder that has submitted a Qualified Bidder Deposit and has submitted documentation evidencing sufficient financial resources and legal capacity to consummate the transaction.  

Any successful bidder shall pay Debtor’s counsel in escrow within ten (10) calendar days of the entry of an order confirming the sale.  Any successful bidder will accept the form and substance of all Ratifications of Leases in the Debtor’s possession as currently proposed, subject to further consent to amend in the interim.  A copy of the Order more thoroughly setting forth all of the specific requirements for any bidder and for the sale is available upon request to ozgascommittee@quinnfirm.com.

Court Approves Sale Option; Halcon Trial Cancelled

Updating a previous post, the Court on November 13, 2012, entered an Order granting, in part, the Debtor's Emergency Motion to Approve Settlement ("Motion") with Halcon Energy.  The Court approved the Sale Option by which Halcon would purchase the all of the Debtor's leases and assets, as is where is, for $10,000,000 in order to settle the pending litigation.  As a result, the trial previously scheduled to begin on Monday, November 19 has been cancelled, and a sale hearing has been tentatively scheduled for January 25, 2013.

Debtor Files Motion to Approve Settlement with Halcon

On November 5, 2012, the Debtor filed an Emergency Motion to Approve Settlement (“Motion”) with Halcon in order to resolve the Complaint for Injunctive Relief that the Debtor previously filed against Halcon.  The Debtor and Halcon have agreed to a choice between two (2) potential settlement scenarios, as set forth in the Motion.  Under the first offer, Halcon would pay the Debtor $10,000,000 to purchase, as is where is, all leases and assets identified in the sale agreement previously approved by the Court (the “Sale Option”).  Under the second offer, Halcon would pay the Debtor $3,500,000 in exchange for a release of all claims arising out of the sale agreement, and the Debtor would retain all of its rights in all leases and assets identified in the sale agreement (the “Cash Option”).  

The Debtor has concluded that the Cash Option is the better settlement offer for the Bankruptcy Estate and its creditors, and it is seeking Court approval for the same on an expedited basis by the filing of its Motion.  A hearing has been scheduled on the Motion for November 13, 2012, at 10:00a.m. in the Erie Bankruptcy Courtroom, U.S. Courthouse, 17 South Park Row, Erie, PA 16501.  Any responses to the Motion are due by November 13, 2012 before 9:00a.m.

Halcon’s Motion for Summary Judgment Denied; Great Plains Exploration files Motion to Continue Injunction/Temporary Restraining Order

On or about October 19, 2012, Halcon filed a Motion for Summary Judgment (“Motion”) against the Debtor with respect to the Debtor’s Complaint for Injunctive Relief (“Complaint”), as mentioned in previous posts.  On October 23, 2012, the Court entered an Order denying Halcon’s Motion primarily because the Debtor’s Complaint is already on a fast track for trial and Halcon’s Motion is not timely.  As a result, the matter remains scheduled for trial beginning on Monday, November 19, 2012, at 9:30am at Bankruptcy Courtroom, U.S. Courthouse, 17 South Park Row, Erie.

In addition, Great Plains Exploration, LLC (“GPE”), an entity affiliated with Oz Gas, Ltd., filed in its own Bankruptcy Case a Complaint for Injunctive Relief (“GPE Complaint”) against 1^st Source Bank in an effort to extend the benefits of the automatic stay to its principal, Richard Osborne.  GPE filed the GPE Complaint to protect Mr. Osborne from 1^st Source Bank’s collection efforts in Indiana state court to the extent that it views him as an important source of funding for any proposed plan of reorganization.  Because Mr. Osborne is also viewed as an important source of funding for any proposed plan of reorganization in the Oz Gas, Ltd. Bankruptcy Case, the Oz Gas Committee has joined in GPE’s efforts to extend the automatic stay.  Those matters remain pending before the Court.

Bank & Committee File Opposition to Debtor’s Exclusive Right to File a Plan; Trial with Halcon Set

On September 4, 2012, the Debtor filed its Second Motion to Extend Exclusivity Period for Filing a Chapter 11 Plan and Disclosure Statement (the “Motion”), which affects the Debtor’s exclusive right to file a plan of reorganization without competing plans from interested parties.  On October 5, 2012, RBS Citizens, NA s/b/m Charter One Bank, NA (the “Bank”) filed a Response in Opposition to the Debtor’s Motion, asserting that the Debtor’s efforts have not been productive and that any interested party should be allowed to file a plan of reorganization or liquidation.  The Committee thereafter joined in the Bank’s Response in Opposition. 

As a result, the Court entered an Order granting the Debtor’s Motion, except with respect to the Bank and the Committee.  Per the terms of the Order, the Debtor’s exclusive right to file a plan expires thirty (30) days after the Bank or Committee exercise their right to send notice to the Debtor terminating the same.

In addition, updating a previous post, Halcon filed on September 18, 2012, an Answer, New Matter, and Counterclaim to the Debtor’s Complaint for Injunctive Relief.  On September 24, 2012, the Debtor filed an Answer to Halcon’s Counterclaim.  A Trial Date has been scheduled for November 19, 2012, at 9:30am at Bankruptcy Courtroom, U.S. Courthouse, 17 South Park Row, Erie.

Debtor Files Complaint for Injunctive Relief Against Halcon Energy

On August 30, 2012, the Debtor filed a Complaint for Injunctive Relief against Halcon Energy Properties, Inc. at Adversary Proceeding Number 12-1092 (TPA) with respect to the previously Court-approved purchase agreement and Sale Order between the Parties.  The Complaint essentially seeks to compel Halcon to effectuate a closing of the sale as a result of an ongoing dispute as to whether certain obligations have been met under the terms of the purchase agreement.  Concurrently therewith the Debtor also filed a Motion for Preliminary Injunction and Motion for Temporary Restraining Order (the “Motion”) in order to preserve certain deadlines from lapsing under the terms of the sale agreement. 

In light of the injunctive relief requested, the Court immediately scheduled a telephonic hearing for August 31, 2012 at 2:00pm.  After the hearing the Court entered an Order staying all deadlines, requirements, and/or obligations described in the purchase agreement and/or Sale Order until the remaining matters raised in the Debtor’s Motion are heard by the Court.  A subsequent hearing will be scheduled regarding the same.

Order Entered Approving Sale to Halcon Energy

Updating a previous post, a hearing on the sale of substantially all of the Debtor's assets was held before the Court on August 16, 2012.  After the hearing, the Court entered an Order approving the sale of the Debtor's assets to Halcon Energy.  The parties are attempting to work together to resolve any issues that remain so that the closing of the transaction may occur in a timely manner.  

Please feel free to contact us at ozgascommittee@quinnfirm.com to obtain a copy of the Sale Order, and/or any other pleadings as filed.

Bar Date to File Proof of Claim About to Expire

Updating an earlier post, the Bankruptcy Court on March 30, 2012, entered a Notice setting the deadline for all creditors to file a proof of claim in the Bankruptcy Case for August 9, 2012.  All claims must be filed by that date in order to receive potential distributions thereon.

Bid Procedures Approved, Sale Hearing Scheduled

After a series of supporting filings and hearings, the Bid Procedures Motion was approved by the Court on June 14, 2012.  As a result, the Sale Hearing will be held on August 16, 2012 at 10:00 a.m. in the Erie Bankruptcy Courtroom.  Any objections to the sale motion (which was subsequently filed on June 19, 2012) are due on or before August 9, 2012.

Potential bidders at the Sale Hearing must satisfy a number of requirements; but most importantly, they must either submit a $1,000,000 deposit 5 days or more prior to the Sale Hearing date or a $5,000,000 bid not less than 24 hours prior to the Sale Hearing.  In the Bid Procedures Motion and the purchase agreement attached thereto, the initial bid is $2,500/acre for deep rights in oil and gas leaseholds of up to 7,346.56 acres, for a total initial offer of $18,411,400.00.  This initial bid is, however, subject to downward adjustment if there are issues with any of the leases – adjusted down $2,500/acre for each lease that does not meet the requirements set forth in the purchase agreement.

In conjunction therewith, the Debtor also filed a schedule of its easements that may be assumed and assigned as to the interests subject to sale, and the cure amount with respect to any defaults on such contracts.  Any objections to the assumption and assignment of any contracts listed must be filed no later than August 3, 2012.

Debtor Files Bid Procedures Motion for Upcoming Sale

On May 25, 2012, the Debtor filed an Expedited Motion for an Order Approving (A) Bidding Procedures For the Sale of  the deep rights in certain oil and gas leases of Debtor, (B) Break-Up Fee Related to the Sale, (C) Assumption and Assignment Procedures for Surface Agreements, (D) Payment of Pre-Petition Royalties and (E) Form and Manner of Sale Notice ("Bid Procedures Motion"), which would govern the sale of certain leases in Warren and Forest Counties that the Debtor had been previously marketing.  While the sale motion has not yet been filed, a copy of the purchase agreement and the list of subject wells are attached to the Bid Procedures Motion.  A hearing was initially scheduled on this matter for June 6, but the hearing is now set for Wednesday, June 13, at 10:00 a.m. in the Erie Bankruptcy Courtroom, U. S. Courthouse, 17 South Park Row, Erie, PA 16501.  Judge Agresti has indicated that he has questions regarding the proposed procedures and will issue an order on the matters he would like addressed before the hearing. 

Please feel free to contact us at ozgascommittee@quinnfirm.com to obtain a copy of the Debtor’s Bid Procedures Motion, and/or any other pleadings as filed.

Debtor Files Motions to Extend Time to Assume/Reject Leases and File Plan of Reorganization

On May 8, 2012, the Debtor filed a Motion to Extend Time to Assume or Reject Unexpired Leases of Nonresidential Real Property pursuant to 11 U.S.C. § 365(d)(4)(B)(i).  The Debtor filed this Motion for the purposes of allowing more time to attempt to sell those leaseholds of deep oil and gas rights that it currently holds.  A hearing on this Motion has been scheduled for June 21, 2012 at 10:00a.m., in the Erie Bankruptcy Court, 17 South Park Row, Erie, PA, with responses due June 14, 2012.

In addition, the Debtor also filed a Motion to Extend Exclusive Period to File a Plan and Disclosure Statement pursuant to 11 U.S.C. § 1121(d).  To the extent that the Debtor is attempting to sell its leasehold rights, in addition to other assets, for the purposes of formulating and funding a plan to pay its creditors, it now seeks more time during which to accomplish that before it must submit a plan to the Bankruptcy Court.  This Motion has also been scheduled for hearing on June 21, 2012 at 10:00a.m., with responses due June 14, 2012.

First Meeting of Creditors Scheduled; Bar Date to File Proofs of Claims Set

On March 30, 2012, the Bankruptcy Court entered a Notice scheduling the Debtor’s First Meeting of Creditors for Friday, May 11, 2012, at 11 a.m. in Bankruptcy Court Conference Room B110, U.S. Courthouse, 17 South Park Row, Erie.  The Notice also set the deadline for all creditors to file a proof of claim in the Bankruptcy Case for August 9, 2012.

Orders Entered Approving Debtor's Use of Cash Collateral and Broker; Debtor Files Completed Petition, Schedules, & Monthly Operating Reports

On or about March 22, 2012, the Debtor's Final Order Authorizing Use of Cash Collateral was entered by the Court.  Essentially the Debtor will be permitted to use cash in accordance with the approved budget to continue operations unless or until the bank or another interested party files a motion to terminate that authority.  In addition, on or about March 27, 2012, a modified Order was entered approving the Debtor's Broker, Joseph W. Haas and Reserve Energy Exploration Company, for the purposes of assisting the Debtor with the marketing and sale of certain of its oil and gas leaseholds.

Also on or about March 26, 2012, the Debtor filed its completed bankruptcy petition and schedules, which include information related to all of the Debtor's unsecured creditors, in addition to a listing of all of the Debtor's other debts, assets, liabilities, contracts, and certain other financial transactions over the last year or so.  Finally, the Debtor has also filed its first two (2) monthly operating reports ("MORs"), which generally contain information related to the Debtor's gross receipts and disbursements, including copies of the Debtor's bank statements and payroll.  The Debtor will continue to file MORs on a monthly basis.  Please feel free to contact us at ozgascommittee@quinnfirm.com to obtain a copy of the Debtor’s completed petition and schedules, MORs, and/or any other pleadings as filed.

Debtor Moves for Approval of Oil & Gas Leasehold Broker, Court Enters Orders Regarding Employment of Certain Professionals

On or about March 2, 2012, the Debtor filed a Motion to Assume Broker Agreement and an Application to Employ Broker, which seek to maintain the pre-existing/pre-petition relationship the Debtor has with Joseph W. Hass and Reserve Energy Exploration Company.  If approved, the proposed employment will allow Reserve Energy Exploration Company to continue assisting the Debtor with the marketing and sale of certain of its oil and gas leaseholds in Pennsylvania.  An expedited hearing on the Motion and Application have been scheduled for March 22, 2012, at 3:00 p.m. in the Bankruptcy Courtroom, U.S. Courthouse, 17 South Park Row, Erie, with responses due by March 21, 2012 at 12:00 p.m. 

Additionally, on or about March 7, 2012, the Bankruptcy Court entered an Order Approving Counsel for Creditors’ Committee, which confirmed the appointment of Lawrence C. Bolla, Esq. and the Law Firm of Quinn, Buseck, Leemhuis, Toohey and Kroto, Inc. as Counsel to the Official Committee of Unsecured Creditors.  An Order approving the application of James E. Sprague and Walthall, Drake & Wallace, LLP as Debtor's Accountant was entered as well.  The Debtor's Application to Employ Richard N. Selby, II, Melvyn E. Resnick, Jodi Littman Tomaszewski, Erik L. Walter and Howard S. Rabb and the law firm of Dworken & Bernstein Co., L.P.A. as Special Counsel was previously withdrawn.

Deadlines Set for Responses to Entry of Final Order Approving Debtor's Use of Cash Collateral and Additional Pleadings

On 2/15/12, the Bankruptcy Court entered a Second Interim Order Authorizing Use of Cash Collateral (“Order”) with respect to the Debtor's continued access to operating funds during the pendency of its Bankruptcy Case.  Concurrently therewith the Court also scheduled a hearing on the final entry of the Order for 3/22/12 at 3:00 p.m. in the Bankruptcy Courtroom, U.S. Courthouse, 17 South Park Row, Erie, with responses to the Order due by 3/15/12.  If no responses are filed, the hearing will be cancelled and the Order will become final.

Also on 2/15/12 the Bankruptcy Court scheduled a hearing on the Motion by Debtor for Entry of Administrative Order Regarding Interim Payment of Compensation and Reimbursement of Expenses of Professionals for 3/22/12 at 3:00 p.m. in the Bankruptcy Courtroom, with responses to the Motion due by 3/15/12.  


In addition, the Debtor's Application to Employ Richard N. Selby, II, Melvyn E. Resnick, Jodi Littman Tomaszewski, Erik L. Walter and Howard S. Rabb and the law firm of Dworken & Bernstein Co., L.P.A. as Special Counsel and the Debtor's Application to Employ James E. Sprague and Walthall, Drake & Wallace, LLP as Accountants are currently scheduled for hearing on 3/8/12 at 9:30 a.m., with responses to the Applications due by 3/1/12.  An Order Granting Application to Employ Bernstein Law Firm, P. C. as Attorney for Oz Gas, LTD was previously entered on 2/7/2012.

Welcome

Welcome to the information website for creditors of Oz Gas, LTD. ("Debtor").  The Debtor filed a voluntary Petition for Relief under Chapter 11 of the Bankruptcy Code on January 11, 2012, in the Bankruptcy Court for the Western District of Pennsylvania, Erie Division.  

On January 31, 2012, the Office of the United Stated Trustee for the Western District of Pennsylvania formed the Official Committee of Unsecured Creditors of Oz Gas, LTD. pursuant to 11 U.S.C. § 1102. Members of the Committee include Pennsylvania Brine Treatment, Inc., Fisher & Father, Inc., and Hess & Associates Engineering, Inc.

Also on January 31, 2012, the Committee held a meeting at which it elected each member as Co-Chair. Thereafter, the Committee voted to engage the Quinn Law Firm as counsel to represent it in these proceedings. Quinn’s retention application was filed on February 1, 2012.  Any objections or responses to the application are due by March 1, 2012, and a hearing is scheduled for March 8, 2012.

This site will be updated throughout the bankruptcy proceeding in order to provide creditors with information about the Debtor's case.  Creditors are able to submit questions and/or comments to the Committee at ozgascommittee@quinnfirm.com.  Please check back for additional updates.

Creditors can also access the Debtor's court docket through the Bankruptcy Court’s PACER website, which is https://ecf.pawb.uscourts.gov.  In order to access the docket and view documents filed in the case you will need to obtain a PACER ID, which will require a credit card. PACER charges $.08 per page view.