Energy Company Seeks to Wrest Asset Sale Proceeds from Trustee
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December 28, 2022, US Bankruptcy Court Southern Texas – EnLink Midstream Operating, LP (“Plaintiff”) files an adversary complaint against Christopher Murray, in his capacity as Chapter 7 trustee (“Trustee”) for South Texas ELV, LLC (“Debtor”), and Hedrick Holdings, LP (“Defendants”). Through the complaint, Plaintiff EnLink asserts a claim over the sale proceeds ($2.5 million) of gas processing equipment sold by the Trustee in the Debtor’s bankruptcy case.
According to EnLink’s complaint, EnLink sold to the Debtor the two subject disassembled gas processing plants located at two EnLink facilities for $2.8 million in 2020. EnLink claims that the Debtor was obligated to remove the equipment within twelve months of the sale. The sale agreement allegedly provides that EnLink is empowered to terminate the agreement and the transaction if the Debtor fails to remove the equipment within the proposed timeline. EnLink alleges that the title of the purchased equipment remaining at EnLink’s location reverted back to EnLink due to the alleged failure of the Debtor to remove them from the site. EnLink claims that it gave due notice of the termination of the sale agreement to the Debtor in May 2022.
The Debtor filed for a chapter 7 bankruptcy on June 3, 2022. The Trustee disputed EnLink’s position, and Hedrick Holdings asserted an unperfected lien over the equipment. Later, the
The Trustee sold the equipment with EnLink’s alleged consent and cooperation and received $2.5 million in proceeds.
EnLink seeks a declaratory judgment that EnLink was the owner of the equipment at the time of its sale by the Trustee and that it owns the proceeds free and clear of the asserted liens and interests of the Defendants. Enlink also requests the Court for an order directing the Trustee to turn over the sale proceeds to EnLink.
EnLink Midstream Operating, LP v. Christopher Murray, et al. (In re South Texas ELV, LLC),
AP No. 22-06064, US Bankruptcy Court for Southern Texas.