MTE: Arena Investors affiliate seeks enforcement of bid procedures order

By Sarah Lizee

Olympia, Wash., June 17 – The backup bidder for MTE Holdings LLC’s assets filed a motion Thursday seeking enforcement of the bid procedures order with the U.S. Bankruptcy Court for the District of Delaware.

Chato Energy, LLC, an affiliate of Arena Investors, LP, was named backup bidder in March. Riverstone Credit Management, LLC was named winning bidder.

Chato said Arena had posted an initial good faith deposit of $3.5 million.

Meanwhile, Riverstone has neither posted the required good faith deposit, nor closed on the transaction, Chato said.

Chato asked the court to enforce the bid procedures order. In this case, the debtors would have to either declare Riverstone to be in default, close the sale to Chato, and keep any funds on deposit from Riverstone, or cancel the sale, in which case Chato’s deposit would be returned, Chato said.

The Arena affiliate said it has been in discussions with representatives of the debtors regarding the status of the sale transaction.

“Either the Riverstone designee at the auction was not truly a qualified bidder because it did not have the wherewithal to close the deal, or the designee was qualified but not willing to close, in which case it breached the agreement with the debtors,” Chato said.

Chato added that if the latter is true, the debtor must explain way it has not pursued its rights against the nominal “winning bidder” and closed with Chato.

MTE is a Midland, Tex.-based holding company. The company filed bankruptcy on Oct. 22, 2019 under Chapter 11 case number 19-12269.

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