Former Moriah Powder River: U.S. trustee objects to proposed sale

By Sarah Lizee

Olympia, Wash., Dec. 4 – US Realm Powder River LLC, formerly Moriah Powder River LLC, needs to file a status report that provides more details on paid and unpaid administrative claims in its case and the structure of the company’s proposed $14 million asset sale to Fulcrum Energy Capital Funds, Region 19 U.S. trustee Patrick S. Layng said in a limited objection filed Monday with the U.S. Bankruptcy Court for the District of Wyoming.

Layng said that, given the substantial unpaid administrative expenses totaling over $39 million, the minimal purchase offer of $14 million for debtor’s assets, and the resulting delay that is likely to occur and lead to more administrative expenses, the court should not grant the motion until the debtor files a status report.

“This case has been pending for over four years and debtor has been in a dire financial condition from the outset,” the U.S. trustee said in the limited objection.

“Debtor’s estate appears to be hopelessly administratively insolvent and appears to have been administratively insolvent almost from the petition date.”

Layng said the company has run into a hitch in the sale process, as the debtor states that it “is unable to effectuate a sale of its assets or equity interests absent the inclusion of the assets of equity interests of its affiliates.”

The company has asked the court to allow it to acquire the equity interests of affiliates Carbon Creek Energy, LLC and Powder River Midstream, LLC as part of the transaction with Fulcrum.

The debtor also believes that any potential party considering a sale transaction involving the debtor’s assets and/or equity interests will propose a structure similar to the transaction being proposed by Fulcrum.

“These developments are all but certain to prolong the bankruptcy case for months, or even years, to come,” the U.S. trustee said.

“Meanwhile, as the case drags on drags, debtor will continue to accrue additional administrative expenses including professional fees (of which $2.7 million have been paid to date), and quarterly U.S. trustee’s fees (which to date have surpassed $3.5 million).”

Moriah Powder River is a Denver-based oil and natural gas exploration and production company. The company filed bankruptcy on Oct. 31, 2019 under Chapter 11 case number 19-20699.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.