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Murphy Energy gas contract party files lawsuit tied to swept funds
By Caroline Salls
Pittsburgh, April 3 – Murphy Energy Corp. gas purchase and sale contract party BBX Operating, LLC filed a lawsuit Friday against the company and Bank of America, NA in connection with an alleged sweep of $2.32 million in trust funds that BBX claims are its property, according to a filing with the U.S. Bankruptcy Court for the Northern District of Texas.
Under the contract, BBX said the parties to which the natural gas liquids and/or condensate were ultimately delivered would wire funds to a bank account at Bank of America for the product delivered by Murphy. BBX said Murphy would then turn those funds over to BBX.
“Though the funds were nominally held in an account in Murphy’s name, Murphy had, at most, bare legal title to the funds, and the equitable owner of the funds was BBX,” the complaint said.
The funds were then to be distributed to working interest owners and royalty owners by BBX consistent with their ownership interests in the wells from which the natural gas liquids and/or condensate were produced.
However, BBX alleged that Bank of America swept all funds in the account holding the trust funds related to oil produced by BBX in May 2016 and took possession of the trust funds.
According to the complaint, the bank subsequently returned other funds from the account to Murphy, including trust funds attributed to one of BBX’s working interest owners, Trinity River Resources, LP, but not the remainder of the trust funds owned by BBX.
Murphy Energy is a Tulsa, Okla.-based privately owned integrated midstream provider of transportation, storage and marketing services for crude oil, natural gas liquids and condensates. The company filed for bankruptcy on Oct. 5 under Chapter 11 case number 16-33971.
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