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RMR Bankruptcy Liquidation Sought

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Black Shale Minerals filed with the U.S. Bankruptcy Court a motion to set deadlines to file and confirm a plan in the Red Mountain Resources (RMR) case or, in the alternative, convert the Company’s Chapter 11 reorganization to a liquidation under Chapter 7.

The motion explains, “It is now nearly two years after the Petition Date and the Debtors have failed to confirm, or even seek confirmation of, a plan of reorganization. Due to the unreasonable delay in filing and confirming a plan of reorganization, there is ample cause for this Court to set deadlines by which the Debtors must file a plan and disclosure statement and promptly proceed with confirmation of such plan or, failing such activity, the Court should convert the Debtors’ cases….Well more than 18 months after the Petition Date and well more than one year after filing the Initial Plan, the Debtors have now abandoned the Initial Plan, and have failed to pursue confirmation of the Initial Plan or any plan at all in these chapter 11 cases.”

In addition, “The Debtors have claimed that their failure to file and confirm a plan of reorganization is due to the dispute with Black Shale….The Debtors cannot simultaneously blame Black Shale for their failure to file and confirm a plan of reorganization, and allege that the claims against Black Shale are ‘beyond peripheral to the bankruptcy.’…Thus, confirmation of a plan is not just a mechanical matter for the Debtors, and the Debtors should be compelled to disclose and proceed with their plans to exit bankruptcy, if any.” No hearing will be conducted hereon unless a written response is filed with the Court by January 26, 2018.

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