White Star Petroleum Holdings, LLC, along with four affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-11179).  White Star is an Oklahoma City, Oklahoma-based oil & gas exploration and production company focused on the mid-continent region, with approximately 883 productive wells in Oklahoma.  White Star was the subject of an involuntary petition filed on May 24 in the Bankruptcy Court for the Western District of Oklahoma.  According to a press release issued by White Star, its filing in Delaware was previously planned and the filing of the involuntary case was not anticipated.   According to the First Day Declaration, White Star enters chapter 11 having begun a prepetition marketing process and will be seeking approval of $28.5 million in debtor-in-possession financing to be provided by its prepetition lenders.  Kurtzman Carson Consultants is the proposed claims and noticing agent.  The cases have been assigned to the Honorable Brendan Linehan Shannon.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

Upcoming Committee Formation Meeting: Friday, May 31, 2019

Case Name: 19-11157 (LSS)

Location: Delaware State Bar Association 405 King Street, 2nd Floor Wilmington, DE 19801

Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. See the petition for relief.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

PWR Oil & Gas General Partners, Inc., a Dallas, TX-based oil & gas company, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 19-11161).  PWR’s Petition reports an estimated $50 – $100 million in both assets and liabilities, and estimates that there will be funds available for distribution to unsecured creditors.  No other pleadings have been filed.  A claims and noticing agent has not yet been proposed.  The case has been assigned to the Honorable Mary F. Walrath.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

Elk Petroleum Inc., along with 3 affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-11157).  The Debtors, headquartered in Denver, CO, are an oil and gas extraction business that specializes in applying enhanced oil recovery techniques to mature oil fields.  According to the First Day Declaration, the Debtors’ parent company, Elk Petroleum, Limited, is a publicly traded Australian entity (ASX: ELK) that commenced a voluntary administration under Australian law on May 15, 2019.  The First Day Declaration further explains that the Debtors enter chapter 11 having solicited votes on a prepackaged plan of reorganization, which contemplates payment in full of general unsecured creditors.  The Disclosure Statement can be found here.  Stretto is the proposed claims and noticing agent.  The cases have been assigned to the Honorable Laure Selber Silverstein.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

Upcoming Committee Formation Meeting: Wednesday, May 29, 2019

Case Name: 19-11104 (BLS)

Location: Delaware State Bar Association 405 King Street, 2nd Floor Wilmington, DE 19801

Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. See the petition for relief.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

Last November, we reported on the long-standing circuit split between the First and Seventh Circuits regarding the effect of rejection of a trademark license agreement under section 365 of the Bankruptcy Code.

This morning, in Mission Product Holdings, Inc. v. Tempnology, LLC,  2019 WL 2166392, the Supreme Court affirmed the Seventh Circuit’s reasoning and held 8-1 that a debtor-licensor’s rejection of a non-exclusive trademark license agreement under section 365 of the Bankruptcy Code does not prohibit its licensee from continuing to use that trademark.  In so doing, the Court flatly rejected arguments that rejection functions as a quasi-rescission:

Today, we hold that both Section 365’s text and fundamental principles of bankruptcy law command the first, rejection as- breach approach. We reject the competing claim that by specifically enabling the counterparties in some contracts to retain rights after rejection, Congress showed that it wanted the counterparties in all other contracts to lose their rights. And we reject an argument for the rescission approach turning on the distinctive features of trademark licenses. Rejection of a contract—any contract—in bankruptcy operates not as a rescission but as a breach.

Id. at *5.

But while the Court provided helpful guidance on the legal effect of a rejection under section 365, Justice Sotomayor emphasized in her concurrence that the “baseline inquiry remains whether the licensee’s rights would survive a breach under applicable nonbankruptcy law.”  Id. at *9.  Thus, according to Justice Sotomayor, it is conceivable that “special terms” in a licensing agreement or provisions of state law could affect a licensee’s right in an individual case.  Id.

There is little question that debtors (and their licensing counterparties) will test the bounds of those “special terms” in the coming years.  But, at least for now, section 365 “does not grant the debtor an exemption from all the burdens that generally applicable law—whether involving contracts or trademarks—imposes on property owners.”  Id. at *8.

Upcoming Committee Formation Meeting: Wednesday, May 22, 2019

Case Name: 19-11047 (KG)

Location: The Du Pont Hotel 42 W. 11th Street Wilmington, DE 19801

Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. See the petition for relief.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

Upcoming Committee Formation Meeting: Tuesday, May 21, 2019

Case Name: 19-11095 (CSS)

Location: Office of the US Trustee 844 King Street, Room 3209 Wilmington, DE 19801

Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. See the petition for relief.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

EdgeMarc Energy Holdings, LLC, along with eight affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-11104).  EdgeMarc, headquartered in Canonsburg, PA, is a natural gas exploration and production company with 60 producing wells in the Appalachian Basin.  The First Day Declaration explains that an explosion along a pipeline system gathering gas from a number of EdgeMarc’s wells, as well as the litigation that explosion spawned, has led to a third of EdgeMarc’s production capacity laying idle.  A press release issued by EdgeMarc explains that EdgeMarc intends to sell substantially all of its assets under section 363 of the Bankruptcy Code.  Prime Clerk is the proposed claims and noticing agent.  The cases have been assigned to the Honorable Brendan Linehan Shannon.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.

JRV Group USA L.P., an Ontario, CA-based tier 2 original equipment manufacturer for Jeep Wranglers, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 19-11095).  The First Day Declaration explains that JRV was formerly the US operating subsidiary of Erwin Hymer Group, a Germany-based recreational vehicle company, and intends to wind down its operations through the chapter 11 case.   BMC Group is the proposed claims and noticing agent.  The case has been assigned to the Honorable Chief Judge Christopher S. Sontchi.

Contact Norman L. Pernick, G. David Dean or Myles R. MacDonald for more information regarding this matter.