On or about March 24, 2014, the Court held a Status
Conference on the Debtor’s Expedited Motion to Approve Settlement Agreement,
which was previously filed on March 19, 2014.
Also at issue was the Debtor’s Expedited Motion for Entry of First
Amended Final Order Authorizing Use of Cash Collateral filed at the same
time. The Expedited Motions seek
approval from the Court regarding the Debtor’s settlement with RBS, as well as
the Debtor’s need to continue using RBS’s cash collateral for operations while
the milestones of the settlement are reached.
The Court at the Status Conference seriously questioned whether the
Debtor had made any legitimate, new efforts to resolve this Case as opposed to
proposing a course of action very similar to its previous, failed plans of
reorganization. The Court also cautioned
that the appointment of a Chapter 11 Trustee remains a very real possibility,
particularly in the Great Plains Exploration, LLC (“GPE”) and John D. Oil &
Gas, Co. (“JDO”) Cases where no Committee has been appointed.
The settlement as presented would have RBS agree to carve-out approximately $100,000 for payment in full to the Oz Gas unsecured creditors, but with an unclear timeline as to when that payment would occur and with no similar carve-out for the GPE and JDO unsecured creditors. The Court subsequently scheduled an Evidentiary Hearing on the Expedited Motions for April 23, 2014, at 10am in the Erie Bankruptcy Courtroom, with responses due by April 16. The Order also specified that the Debtor will be expected to provide a detailed explanation as to how unsecured creditors will fare better in all three (3) Cases if the proposed agreement is approved versus if a Trustee is appointed.
