BTB: Trigeant Chapter 11 filing designed to stop default enforcement

By Caroline Salls

Pittsburgh, Sept. 2 – Trigeant Holdings, Ltd. creditor BTB Refining Ltd. requested relief from the automatic stay imposed by Trigeant’s bankruptcy filing in order to prosecute a lawsuit related to the enforcement of loan default rights, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of Florida.

BTB said it acquired all of American Capital Strategies, Ltd.’s rights in connection with a $22 million loan made in 2006 to Trigeant.

According to the motion, Trigeant defaulted on the loan in the summer of 2007, and BTB foreclosed on Trigeant’s property in 2008. However, a district court ruled that BTB’s real property foreclosure sale constituted a fraudulent transfer. The court did rule that BTB still held a valid lien on Trigeant’s property in Corpus Christi, Texas.

In July 2013, BTB filed a suit in the Circuit Court for Montgomery County, Md., seeking a ruling that it is entitled to exercise default-related rights.

BTB said the Maryland court announced at an Aug. 20 status conference that it was prepared to make a ruling on the summary judgment motion filed in connection with the default enforcement lawsuit.

However, “in an apparent attempt to buy time before the Maryland Court issued its ruling,” BTB said Trigeant’s counsel pointed out that BTB is an involuntary debtor in another bankruptcy case. BTB said “this highly contested involuntary filing was orchestrated by Sargeant Trading, Ltd., an affiliate of the Trigeant entities.”

The Trigeant counsel requested more time to explore whether the involuntary case prevented the Maryland court from ruling on BTB’s motion.

After BTB filed a brief arguing that the Maryland court could proceed unimpeded by the automatic stay imposed by the involuntary filing and Trigeant acknowledged that the automatic stay did not affect the continued litigation of the Maryland lawsuit, Trigeant filed bankruptcy in the Southern Florida court and a “suggestion of bankruptcy” in the Maryland court, the motion said.

BTB said the timing and circumstances of Trigeant’s bankruptcy filing make it clear that the main purpose of the filing was to frustrate BTB’s enforcement of its rights, delay the state court lawsuit and avoid a ruling on BTB’s rights.

Trigeant, a Boca Raton, Fla.-based petroleum company, filed bankruptcy on Aug. 25. The Chapter 11 case number is 14-29027.

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