BJ Services: GACP says Titan IP valuation wrongly withheld from testimony

By Sarah Lizee

Olympia, Wash., Oct. 6 – BJ Services, LLC’s term loan agreement administrative agent, GACP Finance Co., LLC, asked the U.S. Bankruptcy Court for the Southern District of Texas to exclude any testimony from Charlie Leykum concerning valuation of the Titan intellectual property, according to a motion filed Monday.

GACP said CSL Capital Management, LP and its affiliate BJ Energy Solutions, LLC, formerly known as TES Asset Acquisition, LLC, “improperly withheld financial models concerning the valuation of the Titan IP until the day after GACP conducted the deposition of Leykum on Oct. 1.”

GACP noted that Leykum’s testimony is highly relevant to the allocation dispute, as he is the former chairman of the debtors’ board of directors and the principal of CSL, which via its affiliated acquisition company TES, purchased the Titan intellectual property in an “expedited insider sale where there were no other bidders for the Titan IP on a standalone basis or otherwise.”

GACP said that despite the court having declared at a hearing on Sept. 22 that questions concerning the valuation being asked of Leykum are “highly relevant to the issue,” CSL waited 10 days following the hearing before producing internal valuation documents and only produced them after Leykum had been deposed twice.

“CSL’s failure to produce basic, unquestionably relevant documents has again deprived GACP of the opportunity to conduct an effective deposition of Leykum and specifically question him about such documents prior to the allocation hearing,” GACP said.

“Allowing Leykum to testify on the value of the Titan IP – one of the central issues in dispute for the Oct. 6 allocation hearing – would greatly prejudice GACP, as CSL’s discovery abuse in withholding its financial models prevented GACP from being able to conduct an effective deposition of Leykum,” GACP added.

As an alternative to excluding the testimony, GACP asked the court to continue the allocation hearing so that GACP can re-take the deposition of Leykum.

BJ Services is a Tomball, Tex.-based provider of hydraulic fracturing and cementing services to upstream oil and gas companies. The company filed bankruptcy on July 20 under Chapter 11 case number 20-33627.

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