Ruby Pipeline creditor groups want exclusivity terminated

By Sarah Lizee

Olympia, Wash., May 27 – Ruby Pipeline LLC’s exclusive periods to file and solicit votes on a Chapter 11 plan should be terminated, two creditor groups said in court documents filed with the U.S. Bankruptcy Court for the District of Delaware.

The official committee of unsecured creditors filed the first motion, but it was sealed.

Shortly after, an informal group of noteholders filed a joinder to the motion.

The informal group said that the company’s equity sponsors have refused to engage in discussions with the noteholders, and the debtor has “made no semblance of progress” toward a resolution of the Chapter 11 case.

The group noted that the company still hasn’t started a marketing process or filed bid procedures.

“It is vital that the court permit a plan to progress alongside the debtor’s marketing process that would transition ownership to the noteholders in the event such marketing process falls short of a full recovery for the noteholders,” the group said in the joinder.

“Any other approach risks wasting a tremendous amount of estate resources to the benefit of no one, other than professionals and the equity sponsors, and to the direct detriment of the noteholders.”

The noteholders said they have asked several times for the company to start the dual-track process, but the company has refused.

“Given the current status of negotiations and the complete lack of progress on the part of the debtor, it is clear the debtor’s restructuring has stalled for far too long,” the group said.

“There is no reasonable basis to exclude the ad hoc group of noteholders from filing a plan with the overwhelming support of the only impaired third-party class in this case and moving forward with it in parallel with the debtor’s marketing process.”

The group said that letting the exclusivity go on will only result in wasted money, time and opportunity.

If exclusivity isn’t terminated, a Chapter 11 trustee should be appointed, the creditor groups argued.

Ruby Pipeline, based in Houston, is a subsidiary of El Paso Corp. and Global Infrastructure Partners LLC. It is a 680-mile natural gas pipeline that stretches from Wyoming to Oregon. The company filed Chapter 11 bankruptcy on March 31 under case number 22-10278.

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