Debtor Files Emergency Motion to Enforce Automatic Stay Against Receiver

On February 15, 2013, the Debtor filed an Emergency Motion to Enforce the Automatic Stay and Request for Expedited Hearing (“Emergency Motion”) with respect to the efforts of the previously-appointed pre-petition Receiver, Mark E. Dottore (“Receiver”), to collect its fees from RBS in the Northern District of Ohio.  The Debtor argues in part that the Receiver’s efforts violate the stay to the extent that RBS may then charge those fees back to the Debtor on account of its loan obligations.

On February 20, 2013, the Receiver filed a response indicating in part that it had specific authority from the Bankruptcy Court to proceed against RBS, and that such actions do not constitute a violation of the stay protecting the Debtor.  An expedited hearing has been scheduled for Friday, February 22, 2013 at 10am, with responses due by February 21, 2013 at 12pm.

FirstMerit, Debtor Oppose Committee’s Motion for Authority to Prosecute Fraudulent Transfers

Updating a previous post, on or about February 14, 2013, FirstMerit filed an Objection to the Committee's Motion for Authority to Prosecute Fraudulent Transfer Action (“Objection”).  The Debtor also filed a Response in Opposition to Motion for Authority to Prosecute Fraudulent Transfer Action (“Response”, and together with the Objection, “Objections”).  The Objections argue in part that authority to decide whether to pursue such litigation should remain solely with the Debtor and that the cost of pursuing such litigation is greater than the benefit to creditors in light of the Debtor’s proposed Plan of Reorganization. 

Conversely, RBS Citizens, NA s/b/m Charter One Bank, NA (“RBS”) filed a response joining with the Committee’s position.  A hearing remains scheduled for Thursday, February 21, 2013 at 10am.

Court Enters Order Approving Sale to Halcon Energy

On or about January 25, 2013, following a sale hearing, the Court entered an Order Approving Sale of Certain Oil and Gas Leases Free and Divested of Liens (“Order”) with respect to the Debtor’s sale of its Deep Rights to Halcon Energy for $10m.  Upon information and belief, the sale to Halcon has been substantially consummated, and the bulk of the sale proceeds have been paid to the Debtor’s primary secured lender, RBS Citizens, NA, d/b/a Charter One, with the exception of certain holdbacks for administrative expenses subject to further determination by the Court.  A copy of the Order is available upon request to ozgascommittee@quinnfirm.com.

As a result, the Adversary Proceeding filed by the Debtor against Halcon has been closed.