Add to balance / Manage account | User: | Log out |
Prospect News home > News index > List of issuers O > Headlines for Optim Energy, LLC > News item |
Optim creditor appeals court order to prosecute claims of $700 million
By Kali Hays
New York, May 15 - Optim Energy, LLC's largest non-insider creditor, Walnut Creek Mining Co., is seeking an appeal of a court order denying its prosecution of $700 million of claims made by Cascade Investment, LLC and its subsidiary ECJV Holdings, LLC, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.
As previously reported, Walnut Creek is pursuing the claims on the behalf of Optim because Cascade is Optim's debtor-in-possession lender and, therefore, Optim is prohibited from asserting claims against it.
Upon filing its initial request to prosecute the claims, Walnut Creek said that Cascade changed its equity to a secured lien through a 2007 reimbursement agreement that was forcibly triggered after Optim filed for Chapter 11 relief, and Cascade took security interests in substantially all of Optim's assets to secure the reimbursement obligations.
This action led to Cascade "effectively transforming themselves from mere equity holders to senior secured lenders with a claimed lien on substantially all of the debtors' assets," according to the motion.
Walnut Creek said that if the court does not allow the prosecution of the claims, Cascade will "seize all of the value of the debtors' estates, leaving unsecured creditors with little or nothing in the way of recoveries" and that "the costs incurred in pursuing such claims pale in comparison to recognizable value, even when discounting the inherent uncertainty of litigation."
Optim, a Silver Spring, Md.-based power plant owner, filed bankruptcy on Feb. 12. The Chapter 11 case number is 14-10262.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.