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.