Yuma Energy Chapter 7 trustee asks bankruptcy court to dismiss cases

By Sarah Lizee

Olympia, Wash., Oct. 26 – Yuma Energy, Inc. Chapter 7 trustee Laurie Rea asked the U.S. Bankruptcy Court for the Northern District of Texas to dismiss the debtors’ jointly administered cases, according to an emergency motion filed Friday.

Rea said that following conversion of the debtors’ cases from Chapter 11, she has found that the estate has no insurance, insufficient cash with which to procure insurance, current administrative expenses of roughly $1 million, plus nearly $500,000 owed to the interim DIP lender and “no realistic hope of funding the cost of plugging, abandonment, and decommissioning that is or will be required for 100 plus wells.”

The trustee said that of the wells that Yuma operates, only one is producing.

“Cause exists to dismiss this case immediately under 11 U.S.C. § 707(a) as in the best interests of creditors of this estate based on the ever-increasing administrative expenses, lack of funds, and lack of insurance coverage,” Rea said.

Yuma Energy is an oil and gas company based in Houston. The company filed Chapter 11 bankruptcy on April 15, 2020 under case number 20-41455. The cases were converted to Chapter 7 on Oct. 19.

© 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.