Yuma Energy trustee seeks approval of $2.1 million settlement

By Sarah Lizee

Olympia, Wash., Feb. 7 – Yuma Energy, Inc.’s Chapter 7 trustee is seeking approval of a settlement that would bring in $2.1 million to the debtor’s estate, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Texas.

On April 13, 2022, the trustee filed suit on director & officer claims against several entities and individuals.

The litigation is pending in the U.S. District Court for the Northern District of Texas.

Following a two-day mediation, the trustee and the defendants have agreed to settle the litigation for $2.1 million to be paid to the Yuma estate, subject to the court’s approval.

The settlement provides for full releases of the settling defendants, in full and final settlement of the litigation.

Upon receipt of the settlement amount into the Yuma estate, the trustee will be able to pay all anticipated Chapter 7 administrative expenses of around $1 million in full and make a more meaningful distribution of about 50% on allowed Chapter 11 administrative claims, which total over $2 million.

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, 2020.

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