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Mountain Express Oil has Chapter 11 trustee appointed to its case
By Sarah Lizee
Olympia, Wash., Aug. 17 – Mountain Express Oil Co.’s bankruptcy case had a Chapter 11 trustee appointed to it, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.
The move follows a failed sale process, and then an unsuccessful mediation between the company, its debtor-in-possession lenders and other parties that ended Aug. 15.
Shortly after the mediator, judge Marvin Isgur, informed the court that the parties had reached an impasse, the DIP agent filed a motion seeking the trustee appointment.
“The debtors have wasted significant time and estate funds – to the detriment of the estates’ creditors – undertaking a lengthy and flawed sale process that failed to produce a single qualified bidder or qualified bid,” agent First Horizon Bank said in the motion.
“The debtors demanded this expensive sales process by threatening to convert these cases or implementing a priming DIP if the agent did not accede.”
The DIP agent said it disagreed with the debtors’ strategy but ultimately provided funding for the debtors to pursue their course.
“The agent provided the debtors a well-funded runway to conduct a sales process, and the debtors have nothing to show for it today,” First Horizon said.
“The agent is not withholding funds from the debtors that could save the reorganization; to the contrary, the agent is another victim of the debtors’ gross mismanagement, sinking tens of millions into the estates post-petition for the debtors to burn through unchecked.”
The Alpharetta, Ga.-based fuel distributor filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on March 18 under case number 23-90147.
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