In Re Platinum Oil Properties, LLC
465 B.R. 621
Bankr. D.N.M.2011Background
- Platinum filed for Chapter 11 on March 2, 2009 seeking to assume Leases Nos. 71 and 363; Nation opposes transfer of operating rights under those leases.
- Leases 71 and 363 were originally held by Golden Oil under a chain of transfers involving Chace Oil, Golden Oil, McKay-Lotspeich Group (MLG), and later Platinum.
- Golden Oil Bankruptcy Case approved a Settlement and a Golden Oil Plan that purportedly transferred operating rights to MLG with limited liabilities.
- Nation and DOI objected in Golden Oil proceedings; the Golden Confirmation Order purportedly transferred assets to MLG, not Platinum, with the plan providing limited liabilities.
- Platinum later asserted MLG formed Platinum to hold the interests and sought to enforce a transfer to Star Acquisition VII LLC under a separate Purchase and Sale Agreement, raising questions about who actually held title to the Operating Rights and Working Interests.
- The court must determine threshold ownership of the Operating Rights and Working Interests before deciding other bankruptcy-related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Golden Oil Plan binds DOI and Nation despite potential law conflicts | Plaintiff: Golden Oil Plan binds DOI and Nation via res judicata | Nation/DOI: Plan may violate Indian Mineral Leasing Act and Nation law | Plan is binding on DOI and Nation; res judicata prevents contesting its terms. |
| Whether the Nation retains sovereign immunity to defeat plan effects under §1141 | Plaintiff: §106(a) abrogates tribal immunity; plan binds Nation | Nation: sovereign immunity survives; no explicit abrogation | 11 U.S.C. §106(a) abrogates tribal immunity; Nation bound by plan. |
| Whether Platinum or MLG owned the Operating Rights post-Golden Oil Plan | Platinum: plan intended Platinum/its designee as transferee | Nation/DOI: transfers were to MLG; Platinum not designated | MLG was the transferee under the plan; Platinum not proven the intended transferee. |
| Whether parol evidence shows latent ambiguity to reallocate transferee | Parol evidence shows intended transfer to Platinum | No latent ambiguity; documents unambiguous that MLG was transferee | Parol evidence cannot redefine who was the transferee; no latent ambiguity. |
| Whether Platinum can seek relief from the Golden Confirmation Order under Rule 60 | Relief from order due to mistake in transferee designation | Rule 60(b) not available; equitable relief not appropriate | Relief requires Rule 60 motion in the confirming court; not proper here. |
Key Cases Cited
- Bowen v. United States (In re Bowen), 174 B.R. 840 (Bankr.S.D. Ga. 1994) (res judicata effect of a confirmed plan and its binding nature)
- In re K.D. Co., Inc., 254 B.R. 480 (10th Cir. BAP 2000) (confirmed plan binding on creditors and parties in interest)
- In re CF&I Fabricators of Utah, Inc., 150 F.3d 1233 (10th Cir. 1998) (plan enforcement against non-consenting parties; final judgment)
- Republic Supply Co. v. Shoaf, 815 F.2d 1046 (5th Cir. 1987) (finality and res judicata effects of plan confirmations)
- In re Varat Enterprises, Inc., 81 F.3d 1310 (4th Cir. 1996) (finality and res judicata in bankruptcy plans)
- United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367 (2010) (Supreme Court on plan confirmations and release considerations)