MTE Holdings LLC et al. – Preference Defense Lawyer
On November 5, 2021, Plaintiff RPA Asset Management Services, LLC, as Trustee of the MDC Litigation Trust began filing complaints in adversary proceedings, pursuant to sections 547 and 550 of the Bankruptcy Code, seeking to avoid and recover certain transfers made to the individual defendant(s) within 90 days prior to the commencement of the Debtors’ Bankruptcy cases, and to disallow any claims held by the individual defendants.
The reorganized debtors in these jointly administered chapter 11 cases are: MTE Holdings LLC; MTE Partners LLC; Olam Energy Resources I LLC; MDC Energy LLC; MDC Texas Operator LLC; Ward I, LLC; and MDC Reeves Energy LLC.
The Plaintiff seeks to avoid and recover from Defendants all preferential transfers of property that occurred during the ninety (90) day period prior to the commencement of the bankruptcy proceedings of the Debtors. Plaintiff also seeks to disallow Defendants’ claims in the bankruptcy.
The bankruptcy case and these adversary actions are before the Honorable Craig T. Goldblatt.
Background, as alleged by Plaintiff:
Prior to the Petition Date, the Debtors owned and/or operated a privately held exploration and production company focused on the acquisition and development of oil and natural gas resources in the onshore United States.
Procedural History:
On October 22, 2019, MTE Holdings filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. On October 23, 2019, MTE Partners and Olam filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On November 8, 2019 debtors MDC Energy LLC, MDC Reeves Energy LLC, MDC Texas Operator LLC, and Ward I, LLC filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.
These Chapter 11 Cases were jointly administered under Cause No. 19-12269.
On September 3, 2021, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming the Sixth Amended Joint Chapter 11 Plan of Reorganization for MTE Holdings LLC and its Affiliated Debtors [Doc. 2590] confirming the Sixth Amended Joint Chapter 11 Plan of Reorganization for MTE Holdings LLC and its Affiliated Debtors.
Common Defenses in Preference Actions
The United States Bankruptcy Code provides many affirmative defenses to preference actions, contained within Section 547(c). For example, the most common defenses that may be available to a Defendant under Section 547(c) may include:
- the transfer was a contemporaneous exchange for new value given to the debtor (i.e., the debtor received something of value in exchange for the transfer); 11 U.S.C. §547(c)(1);
- after such transfer, Defendant gave new value to or for the benefit of the debtor (i.e., the Defendant extended additional credit to the Debtor after receiving the transfer) 11 U.S.C. §547(c)(4); or
- the transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the recipient (i.e., Defendant made the transfer under ordinary business terms). 11 U.S.C. §547(c)(2).
For more information, see our pages on Preference Defense Litigation: http://www.tobialaw.com/practice-areas/delaware-preference-defense-lawyer/ and Fraudulent Transfer Defense Litigation: https://www.tobialaw.com/practice-areas/delaware-preference-defense-lawyer/defense-of-fraudulent-transfer-actions/
If you conducted business with MTE Holdings LLC or any of the affiliated debtors, and especially if a complaint has been filed against you or your business, even if not served yet, email us at info@tobialaw.com or call the firm’s Wilmington offices directly at (302) 655-5303 to schedule an initial consultation. We can discuss the situation and share with you our initial observations at no charge.