In re Samson Resources Corp.

569 B.R. 605, 2017 Bankr. LEXIS 1646
CourtUnited States Bankruptcy Court, D. Delaware
DecidedJune 15, 2017
DocketBankruptcy Case No. 15-11934(BLS)
StatusPublished
Cited by8 cases

This text of 569 B.R. 605 (In re Samson Resources Corp.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Samson Resources Corp., 569 B.R. 605, 2017 Bankr. LEXIS 1646 (Del. 2017).

Opinion

OPINION

Brendan Linehan Shannon, Chief United States Bankruptcy Judge

INTRODUCTION1

Before the Court are the (i) Debtors’ Amended Second Omnibus (Substantive) [607]*607Claims Objection2 (the “Objection”) which objects, in part, to 22 claims3 filed by various “Parker Heirs” each seeking $100 million on account of their royalty claims and (ii) the Joint Motion of the Debtors and the Official Committee of Unsecured Creditors for Entry of an Order Establishing the Amount of the Disputed Royalty Holder Claims Reserve4 (the “Claims Reserve Motion”). The Parker Heir Claims are based, in part, on an oil and gas royalty lease (as defined and described infra, the “Walling Lease”) entered into by their grandfather. The Parker Heirs dispute whether the Walling Lease is still valid and, if it is, the amount of the royalties owed therefrom.

As discussed in detail below, the Court finds that the Walling Lease is valid and remains in effect, and that it allows for pooling of the mineral interests. As the 25-Acre Tract does not contain any wells, the only entitlement of the Parker Heirs to royalty payments is through the Walling Lease. The Court further finds that the Debtors have paid the Parker Heirs their royalty payments consistent with the provisions of the Walling Lease. As a result, the Court disallows the Parker Heir Claims in full. Furthermore, as the Parker Heir Claims are disallowed, the Court need not reach the Claims Reserve Motion as it is moot with respect to the Parker Heir Claims.

JURISDICTION AND VENUE

The Court has jurisdiction over this matter under 28 U.S.C. §§ 1334 and 157(b)(1) and per the retention of jurisdiction provision embodied in the confirmed Global Settlement Joint Chapter 11 Plan of Reorganization of Samson Resources Corporation and its Debtor Affiliates (with Technical Modifications), Art. XI.5 Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. Consideration of the Objection and the Claims Reserve Motion constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A), (B), and (K).

FACTUAL BACKGROUND

A. Background of Bankruptcy Case

On September 16, 2015 (the “Petition Date”), each of the Debtors filed a voluntary Chapter 11 petition in this Court. During the pendency of their Chapter 11 cases, the Debtors operated their businesses and managed their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Court entered a final order for joint administration of these Chapter 11 cases6 and has not appointed a trustee. The Office of the United States Trustee for the District of Delaware formed an official committee of unsecured creditors of Samson Resources Corporation (the “Committee”) on September 30, 2015.7

On February 13, 2017, the Court en[608]*608tered an order8 confirming the Global Settlement Joint Chapter 11 Plan of Reorganization of Samson Resources Corporation and Its Affiliates9 (the “Plan”). The Final Effective Date (as defined in the Plan) occurred on March 1, 2017. On the Final Effective Date and pursuant to the terms of the Plan, Samson Resources II became the parent of the majority of the above-captioned reorganized debtors (collectively, the “Reorganized Debtors”)..

Also, on the Final Effective Date of the Plan,10 the Second Lien Lenders (as defined in the Plan) became the new equity owners of the Reorganized Debtors and the Committee formed the Settlement Trust. Pursuant to the terms of the Plan, the authority to object to claims was vested in the Debtors and the Reorganized Debtors (with respect to all claims that are not General Unsecured Claims, as defined in the Plan)11 and the Settlement Trust (solely with respect to General Unsecured Claims).12

B. Debtors’ Business

The Debtors were an onshore oil and gas exploration and production company-that owned royalty and working interests in various oil. and,.gas leases primarily located in Colorado, Louisiana, North Dakota, Oklahoma, Texas and Wyoming. As of the Petition Date, the Debtors operated or had interests in approximately 8,700 oil and gas production sites, generating revenue through sales of oil and natural gas to wholesale buyers throughout the United States.

C. Procedural Background Related to Parker Heirs

The Parker Heirs have filed the following claims (collectively, the “Parker Heir Claims”):

[609]*609[[Image here]]

All in, the Parker Heirs have filed claims totaling over $2 billion in the aggregate. The Debtors dispute any liability to the Parker Heirs, but the pendency of such large disputed claims had obvious ramifications for the Debtors’ ability to file and obtain confirmation of a plan of reorganization under Bankruptcy Code § 1129.

Accordingly, on January 24, 2017, the Debtors filed the Debtors’ Motion to Reclassify for All Purposes and Estimate for Voting Purposes Certain Claims Pursuant to the Solicitation Procedures13 (the “Estimation Motion”). In the Estimation Motion, the. Debtors contend that there were certain unresolved unsubstantiated claims asserted by holders of royalty interests (including but not limited to the Parker Heirs), asserting claims for unpaid royalties, trespass, conversion, or other theories. Many of the claims listed in the Estimation Motion were asserted as priority or secured claims and the Debtors requested that a portion of these claims would be reclassified as general unsecured claims.14

In order to make distributions to general unsecured claimants while the claims listed in the Estimation Motion remained unresolved, the Committee and the Debtors jointly filed the Claims Reserve Motion.15 The Claims Reserve Motion proposes to establish a reserve for these disputed royalty claims so that the now Settlement Trust could promptly make distributions to other general unsecured claimants.

Thereafter, on February 28, 2017, the Debtors filed the Debtors’ Amended Second Omnibus (Substantive) Claims Objection,16 which objected, in part, to the Parker Heir Claims and sought, among other related relief, to (a) disallow each of the [610]*610Parker Heir Claims in their entirety, or, in the alternative, (b) reclassify each of the Parker Heir Claims as a general unsecured claim.

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Bluebook (online)
569 B.R. 605, 2017 Bankr. LEXIS 1646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-samson-resources-corp-deb-2017.