Saratoga Resources asks court to disqualify equity committee counsel

By Caroline Salls

Pittsburgh, July 29 – Saratoga Resources, Inc. asked the U.S. Bankruptcy Court for the Western District of Louisiana to disqualify counsel for an informal committee of equity security holders and any representation of the official committee of equity security holders, according to a motion filed Tuesday with the court.

The company said Gardere Wynne Sewell LLP received confidential and/or attorney-client privileged documents and were in communications with some Saratoga officers and directors during which sensitive corporate governance matters were disclosed and discussed.

Saratoga said these talks were related to issues that were first indirectly raised in connection with the official committee appointment motion and are now directly raised in a recent cash collateral objection filed by the informal committee.

The company said Gardere continues to represent the informal committee and plans to represent the official equity committee, once it is formed.

According to the motion, Saratoga is asking the court to review documents obtained from Gardere in connection with the disqualification motion so the court can determine whether the firm can represent either the informal or official committee.

“The debtors believe that Gardere cannot continue to represent either the ad hoc equity committee or an official equity committee once formed, or any other party in these cases as Gardere has, through its interaction with certain officers and directors of the debtors, obtained confidential documents and attorney-client privileged information that are relevant to virtually every aspect of these bankruptcy cases,” the motion said.

“Under these circumstances, the debtors do not believe that Gardere can be counsel for parties holding actual and potentially adverse interests to the debtors.”

The company said its counsel asked Gardere to voluntarily withdraw as counsel to the informal committee and not represent the official committee, but Gardere has not done so.

Saratoga Resources is an oil and natural gas exploration and production company based in Houston. The company filed for bankruptcy on June 18 under Chapter 11 case number 15-50748.

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