Michael D. Warner v. Brad E. Cox, et al.

District Court, E.D. Louisiana·Decided August 21, 2026·No. 2:25-cv-00943·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA MICHAEL D. WARNER CIVIL ACTION VERSUS NO. 25-943 BRAD E. COX, ET AL. SECTION “O” ORDER AND REASONS Before the Court in this civil action and adversary proceeding are a combined motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6),1 and

three motions to dismiss for lack of personal jurisdiction under Rule 12(b)(2).2 The Chapter 7 trustee of seven jointly administered debtor estates sued twenty-six defendants in this Court on forty-seven counts, alleging that the officers who ran a Louisiana oil-and-gas business drained it of more than a hundred million dollars for the benefit of themselves, their families, and a network of affiliated companies and trusts, leaving vendors and other creditors unpaid. The bankruptcy

cases are pending in Texas, where most of the defendants live, are organized, or keep their offices. Seizing on that geography, one defendant argues that only the bankruptcy court in Texas may hear the Trustee’s claims at all. Three groups of defendants argue that this Court cannot reach them because they lack contacts with Louisiana. Neither argument succeeds. The first rests on a statute that confers jurisdiction on district courts rather than bankruptcy courts, and reading it as

1 ECF No. 75. 2 ECF Nos. 30, 36, 85. defendant urges would nullify the surrounding grant of jurisdiction and render the bankruptcy venue statutes incoherent. The second rests on a framework that does not govern this proceeding. Because this is a bankruptcy proceeding, the Bankruptcy

Rules govern it. Federal Rule of Bankruptcy Procedure 7004 authorizes service of process anywhere in the United States in a proceeding related to a bankruptcy case, whether that proceeding is pending before a bankruptcy judge or before a district judge. Where service reaches nationwide, the forum is the United States, and contacts with Louisiana are not the question. Every movant is present in the United States, and most have said so under oath in the very declarations they filed to defeat jurisdiction.

Accordingly, for these reasons and those that follow, the Court DENIES IN PART the combined motion, denying the Rule 12(b)(1) portion and reserving the Rule 12(b)(6) portion, and DENIES the three Rule 12(b)(2) motions. I. BACKGROUND Because this is the Court’s first substantive ruling in this proceeding, and because several related motions remain pending, the Court sets out the background

at some length. A. Seven Affiliated Oil and Gas Companies Filed for Bankruptcy in 2023, and Their Cases Are Now Pending Under Chapter 7 in the Southern District of Texas. Cox Operating L.L.C. and certain affiliates were established in 2003 to acquire oil and gas leases and to operate producing wells in Louisiana state waters and on the Outer Continental Shelf of the Gulf of Mexico, primarily adjacent to Louisiana.3 By 2023 the group operated more than 750 wells across 470 structures in 60 fields.4 Cox Operating served as the operator for wells and related structures owned by the

other entities in the group and provided them operational, administrative, and financial services.5 It listed its headquarters in Dallas, Texas, though its day-to-day operations were run from an operational headquarters in New Orleans, Louisiana, until shortly before the bankruptcy filings.6 On May 12, 2023, four trade creditors filed an involuntary Chapter 7 petition against Cox Operating in the United States Bankruptcy Court for the Eastern District of Louisiana. A fifth creditor joined the next day. Together they asserted

claims exceeding $2.85 million.7 Two days later, Cox Operating and six affiliates filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of Texas.8 The seven debtors are MLCJR LLC and M21K, LLC, both Texas limited liability companies; EPL Oil & Gas, LLC, Energy XXI Gulf Coast, LLC, and Energy XXI GOM LLC, all Delaware limited liability companies; and Cox Operating L.L.C. and Cox Oil

3 ECF No. 12 ¶ 71. 4 Id. ¶ 74. 5 Id. ¶¶ 74, 77. 6 Id. ¶¶ 75–76. 7 Id. ¶ 63; Ch. 7 Involuntary Pet. at 2, In re Cox Operating, L.L.C., No. 23-10734 (Bankr. E.D. La. May 12, 2023), Dkt. No. 1; Joinder Involuntary Ch. 7 Bankr. Pet. at 1, No. 23-10734, Dkt. No. 3. 8 ECF No. 12 ¶ 64; In re MLCJR LLC, No. 23-90324 (Bankr. S.D. Tex. May 14, 2023); In re M21K, LLC, No. 23-90325 (Bankr. S.D. Tex. May 14, 2023); In re EPL Oil & Gas, LLC, No. 23-90326 (Bankr. S.D. Tex. May 14, 2023); In re Cox Operating L.L.C., No. 23-90327 (Bankr. S.D. Tex. May 14, 2023); In re Cox Oil Offshore, L.L.C., No. 23-90328 (Bankr. S.D. Tex. May 14, 2023); In re Energy XXI Gulf Coast, LLC, No. 23-90329 (Bankr. S.D. Tex. May 14, 2023); In re Energy XXI GOM LLC, No. 23- 90330 (Bankr. S.D. Tex. May 14, 2023). Offshore, L.L.C., both Louisiana limited liability companies.9 The bankruptcy court consolidated the seven cases for joint administration on May 16, 2023, under the caption In re MLCJR LLC, et al., No. 23-90324 (CML).10

On May 23, 2023, the Louisiana bankruptcy court transferred the involuntary case to the Southern District of Texas. See In re Cox Operating, LLC, 652 B.R. 49, 59– 60 (Bankr. E.D. La. 2023).11 It found venue proper in both Texas and Louisiana but concluded that transferring the case was in the interest of justice.12 Id. at 54–55, 59. The Texas bankruptcy court entered an agreed order incorporating the transfer order and dismissing the now-transferred involuntary case on June 28, 2023.13 The debtors sold substantially all of their producing assets by February 2024

and moved to convert their cases to Chapter 7, which the bankruptcy court granted on February 28, 2024.14 Plaintiff Michael D. Warner was elected Chapter 7 trustee of the seven estates and qualified on May 8, 2024.15

9 ECF No. 12 ¶¶ 19–26; Ch. 11 Voluntary Pet. at 1, 5–6, In re MLCJR LLC, No. 23-90324, Dkt. No. 1; Ch. 11 Voluntary Pet. at 1, 5–6, In re M21K, LLC, No. 23-90325, Dkt. No. 1; Ch. 11 Voluntary Pet. at 1, 5–7, In re EPL Oil & Gas, LLC, No. 23-90326, Dkt. No. 1; Ch. 11 Voluntary Pet. at 1, 5–6, In re Cox Operating L.L.C., No. 23-90327, Dkt. No. 1; Ch. 11 Voluntary Pet. at 1, 5–6, In re Cox Oil Offshore, L.L.C., No. 23-90328, Dkt. No. 1; Ch. 11 Voluntary Pet. at 1, 5–6, In re Energy XXI Gulf Coast, LLC, No. 23-90329, Dkt. No. 1; Ch. 11 Voluntary Pet. at 1, 5–6, In re Energy XXI GOM, LLC, No. 23-90330, Dkt. No. 1. 10 ECF No. 12 ¶ 65; Order at 3, In re MLCJR LLC, No. 23-90324, Dkt. No. 103. 11 ECF No. 30-4. 12 ECF No. 30-4 at 5–6, 14–15; see also ECF No. 12 ¶ 66. 13 ECF No. 12 ¶ 66; Order at 2–3, No. 23-90324, Dkt. No. 526. 14 ECF No. 12 ¶¶ 67–68; Debtors’ Emerg. Mot. to Convert ¶¶ 1–3, 15, No. 23-90324, Dkt. No. 1661; Order at 2–5, No. 23-90324, Dkt. No. 1720. 15 ECF No. 12 ¶¶ 16, 69–70; Order at 2, No. 23-90324, Dkt. No. 1919; Notice of Bond & Acceptance of Election, No. 23-90324, Dkt. No. 1996. B. The Trustee Filed This Action Alleging That Four Officers and Directors Looted Cox Operating for Their Own Benefit and for the Benefit of Affiliated Entities and Trusts. The Trustee filed this action in this Court on May 12, 2025, styling it both a “Civil Action and Adversary Proceeding.”16 The Operative Complaint is the Second Amended Adversary Complaint and Jury Demand, as amended in three particulars by the Third Amended and Supplemental Adversary Complaint and Jury Demand.17 It pleads forty-seven counts against twenty-six named defendants and fifteen John Doe defendants, and it sorts the named defendants into three groups. The Officer & Director Defendants are four individuals said to have run Cox Operating and its affiliates: Brad E. Cox, Chairman of the Board of Cox

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Michael D. Warner v. Brad E. Cox, et al., (E.D. La. 2026).

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