Cox Oil seeks dismissal of involuntary case, four creditors object

By Sarah Lizee

Olympia, Wash., June 1 – Cox Oil Offshore, LLC asked the U.S. Bankruptcy Court for the Southern District of Texas to dismiss the involuntary Chapter 7 case filed against it by four creditors in the U.S. Bankruptcy Court for the Eastern District of Louisiana, according to an emergency motion filed Wednesday.

The company said that continued prosecution of the involuntary case would necessitate duplication of existing orders and motions, wasting time and resources of the court and parties involved.

The four petitioning creditors were quick to respond, filing an objection on Thursday.

The group said emergency consideration of the motion should be denied because the company didn’t give a reason as to why any emergency exists.

The creditors said that they recently learned that although efforts are underway to transfer the involuntary case to the Texas court, that process hasn’t been completed yet. As such, the Texas court wouldn’t have the jurisdiction to dismiss the case yet, the group said.

The creditors also noted that the Texas court has previously held that “the filing of a voluntary petition while an involuntary petition is pending ought to be treated as the functional equivalent of an admission by the debtor that an order for relief should be entered in the involuntary case, with the two matters then being consolidated under the first filed case, thereby maximizing the look-back period for purposes of Chapter 5 avoidance actions, and minimizing the possibility of wrongful transactions between the filing of the two cases,” in reference to Premier General Holdings, Ltd.’s cases.

“The debtor’s subsequently filed voluntary petition was an admission and constituted an order for relief,” the creditors said in their objection.

The Dallas-based drilling company filed bankruptcy on May 14 under Chapter 11 case number 23-90328. The involuntary Chapter 7 case is under case number 23-10734.

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