Bankrupt oil company wants payments back

The city of Homer is filing a response to a request from an oil company seeking the return of thousands of dollars in previous payments made to businesses.

Australian company Buccaneer Oil filed for Chapter 11 bankruptcy in May of last year. The city, Homer Electric Association and several business received letters from the company’s trustee saying preferential payments made to them in the 90 days before the bankruptcy filing had to be returned, the Homer News reported (http://bit.ly/1Dvx3h5).

“Can we ask for our subsidies back?” council member David Lewis said during a Homer council meeting. “This seems ridiculous. If you collect money from someone and 90 days later they go bankrupt, they can get money back?”

Moore & Moore Services owner Lloyd Moore says he’s still owed $10,000 from Buccaneer Oil that he’ll never see, and now the company wants back the money it did pay him.

The letter from Buccaneer Oil’s trustees says, “It is understandably frustrating for a creditor who received payments for legitimate debts to be required to return the payments.”

It goes on to explain these preferential payments should be returned so that funds can be distributed to creditors proportionately.

City Manager Katie Koester says the city attorney will file a response.

Anchorage bankruptcy lawyer David Bundy says he has been contacted by several business owners who received letters.

“I think trustees often send these things out wholesale, cast a wide net, and see what happens,” Bundy said. “It’s a real surprise to contractors or suppliers who got money a year or a few years ago.”

- Associated Press