Académique Documents
Professionnel Documents
Culture Documents
) )
Deadline for Objections: May 12,2010 at 4:00 p.m. Hearing Date: May 19,20 I 0 at 2:00 p.m.
MOTION OF PACIFIC ENERGY ALASKA HOLDINGS, LLC FOR AN ORDER AUTHORIZING ABANDONMENT OF COOK INLET PIPE LINE COMPANY STOCK
Pacific Energy Alaska Holdings, LLC ("PEAH"), one of the above-captioned
debtors and debtors in possession (together with PEAH, the "Debtors"), hereby moves (the
"Motion") the Court for entry of an order pursuant to section 554 of title 11 of
Code (the "Bankruptcy Code"), authorizing PEAH to abandon nunc pro tunc to the Petition Date
(as defined below) its stock (the "Stock") in Cook Inlet Pipe Line Company ("CIPL"). In
support of
Preliminary Statement
1. By this Motion, PEAH seeks to abandon the Stock, which represents 50%
of the issued and outstanding shares of CIPL because the Stock has no saleable value or other
value to the estates and is burdensome.
the Debtors' federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska
i The Debtors in these cases, along with the last four digits of each of
Holdings, LLC (tax 1.0. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The the Debtors is I I i W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. mailing address for all of
68773-002\DOCS_LA:2 i 8784.6
Jurisdiction
2. This Court has jurisdiction over this Motion under 28 U.S.C. 157 and
1334. This matter is a core proceeding within the meaning of28 U.S.c. 157(b)(2) (A) and (L).
Venue of this proceeding
3.
the Bankruptcy Code and Rule 6007 of
The statutory predicates for the relief requested herein are section 554 of
the Federal Rules of
"Bankruptcy Rules").
Background
4. On March 9, 2009 (the "Petition Date"), the Debtors each filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code. The Debtors are continuing in
possession of
their property and are operating and managing their businesses as debtors in
possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. No request has been
made for the appointment of a trustee or an examiner in this case. The Office of
the United
acquisition, development and exploitation of oil and gas properties in the western United States.
The Debtors' former oil and gas assets are located offshore near California and principally
offshore in Alaska.
2
68773-002\DOCS LA:2 i 8784.6
The Stock
6. The Stock represents 50% (20,000 shares) of
shares of CIPL' s common stock. CIPL owns the Cook Inlet pipeline and Drift River terminal,
which transports oil from wells located in or near Cook Inlet, Alaska. PEAH's wholly-owned
subsidiary Pacific Energy Alaska Operating LLC ("PEAO"), which is also a Debtor, abandoned or sold all of its working interest in oil and gas wells by Orders of this Court and no longer
requires CIPL to provide transportation services. The owner of
the issued and outstanding CIPL common stock is Union Oil Company of California ("Union").
CIPL has informed this Court that Union's affliate Chevron Pipe Line Company ("Chevron")
operates and maintains the Cook Inlet Pipe Line (see Docket No. 1499 at ~ 2).
barrel of oil transported. Tariffs are periodically revised pursuant to RCA procedures to the
extents costs or volumes change. Tariffs also cover future decommissioning obligations, so to
the extent such estimated costs change, or the estimated service life of the assets change, then
tariffs must also be adjusted, again pursuant to RCA procedures.
8. In general, volumes produced have been declining for many years as the
Cook Inlet-area oil fields deplete. The volcanic eruption ofMt. Redoubt beginning on March 22,
2009 added many clean up and repair costs, and reduced revenues dramatically during the period
of disruption. As a result, CIPL's cash reserve has been depleted dramatically. There are also
3
68773-002\DOCS _ LA:218784.6
significant future decommissioning obligations associated with CIPL's assets, and, to reserve
funds for such obligations, CIPL, as a regulated entity, is not permitted pay dividends. CIPL has
estimated such obligations will total approximately $42 million (on a present value basis).
CIPL's claim #489. Any potential buyer of
assuming substantial future decommissioning costs as the RCA has historically required the
CIPL owners to stand behind this obligation.
9. Perhaps for the foregoing reasons, the PEAH was unsuccessful in
obtaining any binding offers to purchase the Stock, despite a concerted marketing effort by the
Debtors and their retained investment banker, Lazard Frres & Co., LLC, to sell the Stock as part
of
the Debtors' Group 1 Assets, which assets and marketing effort are described in detail in the
Debtors' motion for approval of sale procedures (Docket No. 453) (approved by this Court's
Order at Docket No. 532) and the Debtors' sale motion for their Alaska assets (Docket No. 545).
While some initial non-binding expressions of interest included the Stock, the Stock was neither sold to the successful bidder or back-up bidder at the auction held by the Debtors on July 20,
2009, nor to the subsequent successful buyer of certain of PEAO's Group 1 Assets, Cook Inlet
4
68773-002\DOCS_LA:2 i 87846
Energy, LLC and remains an asset ofPEAH's chapter 11 estate (subject to entry of
the Order
Relief Requested
10. By this Motion, PEAH seeks to abandon the Stock effective nunc pro tunc
as of the Petition Date because it is burdensome to the Debtors' estates and is of no value or
other benefit to the estates.
hearing, the trustee (or debtor-in-possession) may abandon any property of the estate that is
burdensome to the estate or that is of inconsequential value and benefit to the estate." 11 US.c.
554(a); see also FED. R. BANKR. P. 6007. "The trustee's power to abandon property is
discretionary." In re Slack, 290 B.R. 282, 284 (Bankr. D.NJ. 2003) (citations omitted). "Courts
defer to the trustee's judgment and place the burden on the party opposing the abandonment to
prove a benefit to the estate and an abuse of
the abandonment must show some likely benefit to the estate, not mere speculation about
possible scenarios in which there might be a benefit to the estate." Id. The court only needs to
2 Both the successful bidder (Ammadon Limited and Catherwood Limited) and backup bidder (New Alaska Energy,
LLC) at the auction failed to close the sale. Certain of this Courts' Order Granting Alternative Motion of the Debtorsfor an Order Authorizing Abandonment of
Interests in Oil and Gas Properties in Alaska (Excluding Trading Bay) and Rejection of ExecutOlY Contracts
Relating Thereto entered on September I I, 2009 (Docket No. 876); however, the Stock was not abandoned. Such
abandonment order was later vacated in part and certain of
pursuant to this Court's Conditional Order (A) Vacating the Court's Abandonment Order in Part
Assets and (B) Authorizing the Debtors to Sell Certain Alaska Assets entered on November 25,2009 (Docket No. I 157) but the Stock was not an asset affected by such order. Nevertheless, while not affecting ownership of the Stock, the Debtors have rejected the Cook Inlet Pipe Line Funding Agreement with Union by this Court's Order Granting Debtors' Third Motionfor Order under Section 365(a) of the Bankruptcy Code Authorizing the Debtors to
Reject Certain Executory Contracts and Unexpired Leases entered November 25, 2009 (Docket No. I 158).
5
68773-002\DOCS_LA:2 i 8784.6
find the trustee made: 1) a business judgment; 2) in good faith; 3) upon some reasonable basis;
with a possessory interest in it. See In re Guterl Special Steel Corp., 316 B.R. 843, 861 (Bankr.
W.D. Pa. 2004) (abandoned property reverts nunc pro tunc to the debtor or the party with
possessory right to the property as of
338 F.2d 392, 394 n.l (9th Cir. 1964) ("The ordinary rule is that, when a trustee abandons
property of
the bankrupt, title reverts to the bankrupt, nunc pro tunc, so that he is treated as
having owned it continuously.") (citations omitted); see also Midlantic Nat 'I Bank v. New Jersey
Dept. of Environmental Protection, 474 US. 494, 507 (1986) ("Although 544 does not specify
to whom the property is to be abandoned, the legislative history suggests that it is to the person
having a possessory interest in the property. . .. Such abandonment is to the person having the
possessory interest in the property."); Ohio v. Kovacs, 469 U.S. 274,284 n. 12 (1985)
("(A)bandonment is to the person having the possessory interest in the property.").
13. As noted above, once the trustee or debtor in possession makes a
reasonable business judgment to abandon property of the estate, the threshold for approval of the
abandonment is low. PEAH has determined in its sound business judgment and in good faith to
abandon the Stock.
6
68773-002\DOCS LA:2 i 8784.6
14. Not only is the stock unsalable due to its associated decommissioning
obligations, it does not earn PEAH's estate any income because CIPL is restricted from paying
dividends in order to fund its decommissioning reserve. Therefore, there is no value that can be
realized out of
this Motion and its intent to abandon the Stock on "all creditors." The Debtors'
consolidated matrix contains over 1,100 creditors. PEAH submits that service of this Motion on
all of these individuals is overly burdensome. PEAH will serve a copy of this Motion and
supporting documents on the constituents set forth below and, therefore, requests a limited
waiver of
the service requirement set forth in Rule 6007. PEAH submits that the requested
this Motion has been given to the following parties or, in lieu
known: (a) Office of
Delaware; (b) counsel for the Debtors' prepetition and postpetition lenders; (c) counsel for the
Offcial Committee of Unsecured Creditors; (d) counsel for Union Oil Company of California;
(e) counsel for Chevron Pipe Line Company; (f) counsel for Cook Inlet Energy, LLC; (g) counsel for the State of Alaska; (h) counsel for Cook Inlet Pipe Line Company; and (i) those
7
68773-002\DOCS_LA:218784.6
persons who have requested notice pursuant to Bankruptcy Rule 2002. PEAH submits that, in
light of the nature of the relief
No Prior Request
17. No previous motion for the relief sought herein has been made to this or
any other Court.
WHEREFORE, PEAH respectfully requests that the Court enter an order (a)
granting this Motion; (b) authorizing the abandonment of the Stock nunc pro tunc to the Petition
Date pursuant to section 554 of
the Bankuptcy Code; and (c) granting such other and further
8
68773-002\DOCS_LA2 i 87846
In re:
) ) ) ) )
Chapter 11
NOTICE OF MOTION OF PACIFIC ENERGY ALASKA HOLDINGS, LLC FOR AN ORDER AUTHORIZING ABANDONMENT OF COOK INLET PIPE LINE COMPANY STOCK
TO: (i) Offce of the United States Trustee for the District of Delaware; (ii) counsel for the Debtors' prepetition and postpetition lenders; (iii) counsel for the Offcial Committee of Unsecured Creditors; (iv) counsel for Union Oil Company of California; (v) counsel for Chevron Pipe Line Company; (vi) counsel for Cook Inlet Energy, LLC; (vii) counsel for the State of Alaska; (viii) counsel for Cook Inlet Pipe Line Company; and (ix) those persons who have requested notice pursuant to Bankruptcy Rule 2002.
Pacific Energy Alaska Holding, LLC, one of the above-captioned debtors and
debtors in possession, filed the Motion of Pacifc Energy Alaska Holdings, LLCfor an Order
Authorizing Abandonment of
Cook Inlet Pipe Line Company Stock (the "Motion"), with the
Delaware 19801 (the "Bankuptcy Court"). A copy of the Motion is attached hereto.
PLEASE TAKE FURTHER NOTICE that by May 12,2010, at 4:00 p.m.
prevailing Eastern time, which is the deadline for filing any response or objection to the Motion with the Bankruptcy Court, you must file any such response or objection with the Bankruptcy
the Debtors' federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska
i The Debtors in these cases, along with the last four digits of each of
Holdings, LLC (tax 1.0. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC
(702 i); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of
the Debtors is
Court and also serve a copy of it upon the Debtors c/o Pacific Energy Resources Ltd., 111 W.
Ocean Boulevard, Suite 1240, Long Beach, CA, Attn: Gerald A. Tywoniuk, Acting Chief
Executive Offcer (email: gtywoniuk(fpacenergy.com). with a copy to: (a) the Debtors'
financial advisor, Zolfo Cooper LLC, 1166 Avenue of
Attn: Scott W. Winn, Senior Managing Director (email: swinn(fzolfocooper.com) and Mark A.
Cervi (email: mcervi(fzolfocooper.com); and (b) the Debtors' counsel (i) (A) Pachulski Stang
Ziehl & Jones LLP, 10100 Santa Monica Blvd., 11th Floor, Los Angeles, California 90067-4100,
Floor, Wilmington, Delaware 19801, Attn: James A. O'Neill (email: joneill(fpszjlaw.com); (ii)
Rutan & Tucker, LLP, 611 Anton Blvd., 14th Floor, Costa Mesa, CA 92626, Attn: Gregg
Washington, DC 20036, Attn: Fil Agusti (email: fagusti(fsteptoe.com); (d) counsel to the
Debtors' prepetition and postpetition lenders: (i) Bingham McCutchen LLP, 399 Park A venue,
New York, NY 10022, Attn: Jeffrey S. Sabin (email: jeffrey.sabin(fbingham.com); and (ii)
Skadden, Arps, Slate, Meagher & Flom LLP, 333 West Wacker Drive, Chicago, Ilinois 60606,
Attn: Seth E. Jacobson (email: seth.jacobson(fskadden.com); (e) counsel to Rise Energy Beta, LLC: Haynes & Boone, 2323 Victory Avenue, Dallas, Texas 75219, Attn: Robert D.
68773-002\DOCS_LA218784.6
68773-002\OOCS_LA:218784.6
2)
68773-002\DOCS_LA:2 i 8784.6
In re: ) Chapter 11
)
Debtors. )
) Jointly Administered
Energy Alaska Holdings, LLC ("PEAH"), one of the above-captioned debtors and debtors in
possession (together with PEAH, the "Debtors"), for entry of an order, pursuant to section 554 of
the Bankruptcy Code, authorizing PEAH to abandon nunc pro tunc to the Petition Date its stock
(the "Stock") in Cook Inlet Pipe Line Company. PEAH submits that the Stock is burdensome
and of inconsequential value or benefit to PEAH's estate. Having reviewed the Motion, the
Court finds that (a) the Court has jurisdiction over this matter pursuant to 28 US.c. 157 and
1334, (b) this is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A) and (L), (c) venue of
these chapter 11 cases in this District is proper pursuant to 28 U.S.c. 1408 and 1409, and (d)
notice of
the Motion was sufficient under the circumstances, and the Court having determined
that the legal and factual bases set forth in the Motion establish cause for the relief sought
each of the Debtors' federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska
i The Debtors in these cases, along with the last four digits of
Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC
(7021); Cameros Energy, 1nc. (9487); and Gotland Oil, 1nc. (5463). The mailing address for all of
the Debtors is
1 i 1 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. 2 Capitalized terms not otherwise defined herein shall have the meanings set forth in the Motion.
68773-002\DOCS_LA:218784.6
therein, and it appearing that the relief requested is in the best interest of PEAH, its estate,
creditors, and other parties in interest; it is hereby:
ORDERED that the Motion is Granted; and it is further
ORDERED that PEAH is authorized to abandon and is deemed to have
abandoned the Stock effective nunc pro tunc as of the Petition Date pursuant to section 554 of
the Bankruptcy Code; and it is further
ORDERED that nothing in this Order shall determine the party or parties who
will gain title to the Stock, or may be responsible for any obligations arising under or in
connection with the Stock, upon abandonment by PEAH's estate, provided, however, that title in
the Stock shall not vest in any of
further
3 Both terms as defined in that certain Final Order Pursuant To / / u.s.e. /05,36/,362.363,364,365 And
Cash Collateral; (3) Granting Liens And Providing Superpriority Administrative Expense Status; (4) Granting Adequate Protection; And (5) ModifJing Automatic Stay (Docket No. 415).
507: (/) Approving Senior Secured Superpriority Postpetition Financing; (2) Authorizing Use Of
2
68773-002\DOCSJA:2 i 8784.6
In re: )
STATE OF DELAWARE )
) ss:
) )
Debtors. )
AFFIDAVIT OF SERVICE
is employed by the law firm ofPachulski Stang Ziehl & Jones LLP, counsel for the Debtors, in
the above-captioned action, and that on the 30h day of April, 2010, she caused a copy of
the
following document(s) to be served upon the individuals on the attached service list(s) in the
manner indicated:
Pacifc Energy Alaska Holdings, LLC for an Order Authorizing Abandonment of Cook Inlet Pipe Line Company Stock;
Notice of Motion of
Motion of Pacific Energy Alaska Holdings, LLC for an Order Authorizing Abandonment of Cook Inlet Pipe Line Company Stock;
1 The Debtors in these cases, along with the last four digits of each of
number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska
Holdings, LLC (tax I.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC
(7021); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of
the Debtors is
) )(
Pacific Energy Special Service List Motion Abandon Cook Inlet Pipe Line Company Stock
Case No. 09-10785
Document No. 159531
Hand Delivery (counsel for Cook Inlet Energy, LLC) William D. Sullivan, Esq. Sullivan, Hazeltine & Allinson LLC
4 East 8th Street, Ste 400
Wilmington, DE 19801
Hand Delivery (Counsel for State of Alaska) Joseph H. Huston, Jr, Esquire Maria Aprile Sawczuk, Esquire Stevens & Lee PC 1105 N. Market Street, Ste 700
Wilmington, DE 19801
Hand Delivery (Counsel for Cook Inlet Pipe Line Company) Stephen M. Miller, Esquire Brett D. Fallon, Esquire Morris James LLP
500 Delaware Avenue, Ste 1500
Wilmington, DE 19801
Hand Delivery (United States Attorney) Ellen W. Slights, Esq. United States Attorney's Offce District of Delaware
1007 N. Orange Street, Suite 700
Wilmington, DE 19801
Hand Delivery (Counsel for Silver Point Finance) Ian S. Fredericks, Esquire
Skadden Ars, Slate, Meagher & Flom LLP
(Counsel for Debtors) Laura Davis Jones, Esquire James E. O'Neil, Esquire Kathleen P. Makowski, Esquire Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705
Interoffice Pouch to Los Angeles Counsel for Debtors) Robert M. Saunders, Esquire Ira D. Kharasch, Esquire Scotta E. McFarland, Esquire Pachulski Stang Ziehl & Jones LLP
10100 Santa Monica Blvd., 11th Floor
Wilmington, DE 19899
Hand Delivery (Counsel for Union Oil Company of California, a California Corporation) Norman M. Monhait, Esquire Rosenthal, Monhait & Goddess, P A
Citizens Ban Center, Suite 1401
Wilmington, DE 19801
Hand Delivery (Copy Service)
Parcels, Inc.
Wilmington, DE 19801
Hand Delivery (Counsel for Oxy Long Beach Inc.) David L. Finger, Esquire
Finder, Slanina Liebesman, LLC
Hand Delivery
Wilmington, DE 19801
Hand Delivery
(Offcial Committee of
Unsecured
Creditors) David B. Stratton, Esquire James C. Carignan, Esquire Pepper Hamilton LLP
Hercules Plaza, Suite 1500
Hand Delivery (Counsel for Forest Oil Corporation) Robert J. Dehney, Esquire
Curis S. Miler, Esquire
Morris Nichols Arsht & Tunnell LLP 1201 N. Market Street Wilmington, DE 19899
Hand Delivery (Counsel for Stellar Energy LLC) Brian E. Farnan, Esquire Philips, Goldman & Spence, P.A. 1200 North Broom Street Wilmington, DE 19806
Hand Delivery (Counsel for Ramshorn Investments, Inc.) Jonathan L. Parshall, Esquire Murphy & Landon
1011 Centre Road, Suite 210
Hand Delivery (Counsel for Marathon Oil Company) Kevin J. Mangan, Esquire W omble Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Hand Delivery (Counsel for Cook Inlet Region, Inc.) Eric Lopez Schnabel, Esquire Dorsey & Whitney (Delaware) LLP
300 Delaware Avenue, Ste 1010
Wilmington, DE 19805
Hand Delivery (Counsel for Longfellow Energy LP)
Teresa K.D. Curier, Esquire
Wilmington, DE 19801
Hand Delivery (Counsel for Area Energy LLC) Norman L. Pernick, Esquire Karen M. McKinley, Esquire Cole, Schotz, Meisel, Forman & Leonard, P.A. 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801
Saul Ewing LLP 222 Delaware Avenue, Suite 1200 Wilmington, DE 19899
Hand Delivery (Counsel for Rise Energy Partners, LP) Christopher A. Ward, Esquire Justin K. Edelson, Esquire Polsinelli Shughart, PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801
Brett D. Fallon, Esquire Douglas N. Candeub, Esquire Morris James LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19899
Washington, DC 20549
District Director Internal Revenue Service 31 Hopkins Plaza, Room 1150 Baltimore, MD 21201
Banptcy Coordinator
MMS / Denver Federal Center POBox 25165 Mail Stop 370B2 Denver, CO 80225
Greenwich, CT 06830
Chicago, IL 60606-1720
E. Kathleen Shahan, Esquire U.S. Department of Justice 1100 L Street, NW Washington, D.C. 20005
Philadelphia, P A 19103
John J. Haris, Esquire Rachel M. Feiertag, Esquire Meyers, Nave, Riback, Silver & Wilson 333 South Grand Avenue, Suite 1670 Los Angeles, CA 90071
Unsecured
Creditors) Robbin Itkin, Esquire Katherine Piper, Esquire Kelly Frazier, Esquire Steptoe & Johnson LLP 2121 Avenue ofthe Stars, 28th Floor Los Angeles, CA 90067
Baltimore, MD 21209
Anchorage, AK 99501
Unsecured
Creditors) Francis J. Lawall, Esquire Pepper Hamilton LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, P A 19103
Marin A. Mooney, Esquire Deily, Mooney & Glastetter, LLP 8 Thurlow Terrace Albany, NY 12203
U.S. Deparment of Justice 1100 L Street, NW - Room 10000 Washington, D.C. 20005
Region
755 Parfet Street, Suite 151
Amarilo, TX 79105
Lakewood, CO 80215
the Americas
(Counsel for Longfellow Energy LP) David M. Bennett, Esquire Rhett G. Campbell, Esquire Robert L. Paddock, Esquire Thompson & Knight, LLP 333 Clay 81., Suite 3300 Houston, TX 77002
Robert D. Albergotti, Esquire Mark Elmore, Esquire Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, TX 75219