Rincon Island agent requests payment of legal fees tied to financing

By Caroline Salls

Pittsburgh, March 6 – Rincon Island LP credit agreement agent UBS AG, London Branch asked the U.S. Bankruptcy Court for the Northern District of Texas to enforce an agreed final order approving post-bankruptcy financing and to resolve objections to fee statements, according to a motion filed March 3.

“Apparently, Rincon Island LP believes that its senior secured creditor, which is owed over $100 million, should participate in this case without incurring any attorney’s fees. Not a single cent,” UBS said in its motion.

UBS said Rincon Island obtained its consent to use its cash collateral early in Rincon Island’s bankruptcy case in exchange for the payment of UBS’ legal and other professional fees.

Although the court told UBS that it did not need to file full fee applications, including time entries, “the debtor has refused to pay a penny of the legal fees incurred by UBS’ primary counsel in this case.”

UBS said Rincon Island has called the fee statements “vague and ambiguous, uncertain, and potentially duplicative,” and “unreasonable when considering the issues involved in the case that require UBS’ attention, and the relative value of UBS’ collateral.”

The company only offered to pay a reduced amount of roughly $13,000 in fees charged by UBS’ local counsel between August 2016 and October 2016, the motion said.

Rincon Island, a Santa Maria, Calif.-based oil and gas production company, filed bankruptcy on Aug. 8, 2016. The Chapter 11 case number is 16-33174.

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