Buccaneer creditors want time

Believe disclosure of proposed distribution plan is premature and fails to meet the requirements of bankruptcy law

Eric Lidji

For Petroleum News

A group of creditors wants a bankruptcy court to reject part of the plan Buccaneer Energy Ltd. proposed for selling its assets and dispersing the funds among its many creditors.

The creditors believe a disclosure statement attached to the plan is premature and lacks all the information creditors need to make to decide whether to support the plan.

The statement is premature, according to the creditors, because certain “estate claims” and “causes of actions” are currently under way and have yet to be resolved.

And the statement is incomplete, according to the creditors, because Buccaneer needs to disclose precisely which assets are on the sale block and needs to propose “definitive deal terms” for the sale. They also believe Buccaneer must disclose the value of the properties being sold, which they claim the company can only determine by holding an actual sale.

The disclosure statement is meant to explain a proposed distribution plan to creditors, who must approve the plan through a vote. The court must approve the disclosure before creditors can vote on the plan. Buccaneer had submitted the disclosure alongside its proposed sale plan and asked the court for conditional approval of the disclosure.

Various objections

Should the court conditionally approve the disclosure statement, the Official Committee of Unsecured Creditors has asked for its comments to be appended to the document.

When Buccaneer filed the plan and disclosure statement, in late June, it conditioned the distribution plan on closing a sale of its producing Kenai Loop gas field, in Cook Inlet.

In justifying its objection, Cook Inlet Region Inc. pointed to its ongoing legal claims against Buccaneer over correlative rights and lease ownership at the Kenai Loop field.

AIMM Technologies had provided waste-disposal services for Buccaneer and All American Oilfield Associates had manned the onshore Glacier No. 1 drilling rig. The companies believe Buccaneer must provide a detailed list of assets proposed for sale, and specifically mentioned any tax credits the company has requested from the state.

The various objectors also pointed to a pending investigation to determine the relationship between AIX Energy Inc. and Meridian Capital International Fund. AIX is Buccaneer’s largest secured lender and Meridian owns the largest stake in Buccaneer.

The court previously extended a deadline for Buccaneer to file its plan until Aug. 26.

Come to Houston

The directors had argued they should be allowed to testify by videoconference to save the time and expense of traveling from England and Australia, respectively, to Texas.

By choosing to be directors of a company operating exclusively in the United States, the committee argued, the men should have expected to make the trip to Texas, when needed.

Buccaneer Energy is an Australian company, but its eight affiliated subsidiaries are American companies and conduct their business exclusively in the United States.

The committee also pointed to a recent ruling in Australia that designated the bankruptcy case as a “foreign main proceeding,” thus shifting the proceedings to the United States.

“It simply rings hollow that these directors are unduly burdened in being required to travel to the U.S.,” an attorney for the committee wrote in an objection. “One imagines that in the exercise of their duties to these companies, with assets and operations exclusively in the U.S., they have or reasonably anticipated having to travel to the U.S.”