Mountain Express Oil mediation terminated with parties at an impasse

By Sarah Lizee

Olympia, Wash., Aug. 15 – The mediation between Mountain Express Oil Co., its debtor-in-possession lenders and other parties has been terminated, according to a statement filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The mediator, judge Marvin Isgur, said the parties are at an impasse.

As previously reported, judge David R. Jones had ordered for mediation after a hearing, calling the case “a mess” in light of the company’s complicated sale process and dispute between the company and its DIP lenders.

In a statement filed prior to the hearing, the official committee of unsecured creditors said it had become increasingly clear that the debtors and the DIP lenders “are not behaving like rational economic actors” and that their relationship has “devolved into one of mistrust and blame shifting.”

“While the committee would absolutely prefer a path that avoids the conversion of these cases, preserves jobs, and sells the debtors’ business as a going concern, the option presented by the debtors is unworkable based on the information the committee has at this point in time,” the group said.

After hearing the arguments, judge Jones recognized that the sale process had failed and asked the parties to try to come up with a solution that minimizes harm as much as possible.

The Alpharetta, Ga.-based fuel distributor filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on March 18 under case number 23-90147.

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