Anadarko: Bankrupt Marketer Gambled with Customers' Money
As Kansas City, MO-based Mountain Energy Corp. was forced into
bankruptcy and its assets seized last week, more allegations were
emerging that the gas marketer spent millions of dollars of company
funds on stock in a five-year-old e-business company whose value
has nose-dived over the past year.
In papers filed in a federal bankruptcy court in Missouri,
Anadarko Energy Services Co., which paid the marketer $8.7 million
for 3 Bcf of storage gas that it has yet to see, claimed "a part or
all of the funds" that it gave Mountain Energy "were used to
purchase speculative stock in Sagent Technology, a dot.com start-up
trading on the NASDAQ stock exchange."
Mountain Energy bought the stock in Sagent Technology at
"approximately $40 per share," Anadarko Energy said, adding that it
"currently trades in the range of $3 to $5 per share." Stock in
Sagent Technology, which is based in Mountain View, CA, was listed
at 3 3/16 at mid-day Friday.
Moreover, Anadarko Energy said that based on a "brief on-site
audit" of a facility that was to have been storing the 3 Bcf of gas
it purchased from Mountain Energy, it now believes the marketer may
have sold the same gas to multiple parties.
In addition to the $8.7 million, Anadarko Energy said Mountain
Energy owes it about $23.2 million for gas that it delivered to the
marketer last summer. Mountain Energy has "failed and refused" to
pay for the gas, it noted.
In the U.S. Bankruptcy Court for the Western District of
Missouri, Mountain Energy filed a consent order last week in which
it agreed not to contest efforts by creditors to force it into
Chapter 7 bankruptcy.
The company took this action last Monday just prior to a
scheduled hearing in which Bankruptcy Judge Frank Koger was to have
ruled on whether to grant a petition by creditors for involuntary
Four companies --- TransCanada Energy Marketing USA, Tenaska Marketing Ventures,
Farmland Industries and DuCoa LP --- brought the petition in the Missouri
bankruptcy court last month, claiming they lost $24.6 million as a result
of their business dealings with the marketer (See NGI, Oct.
By filing the consent order, Mountain Energy essentially has
agreed to dissolve its business. All telephone calls to the
marketer last week went unanswered. The court appointed Steven C.
Block, a Kansas City attorney, as interim trustee. He was ordered
to "immediately collect and take possession of the property of the
estate" and all other assets, which then will be liquidated to pay
creditors. Creditors' claims against Mountain Energy are estimated
to be in the neighborhood of $70-$75 million.
Mountain Energy agreed to liquidate its business because the
other option --- re-organizing its troubled company and seeking
court protection --- wasn't very realistic for the marketer. That's
because "there's really no business left at this point to
reorganize since we were unable to supply gas to our customers for
the month of November," Carl R. Clark, a Kansas attorney
representing the marketer, told NGI.
The first meeting of the company's creditors will be held in
The marketer served more than 600 industrial and commercial
customers in Missouri and Kansas, as well as sold and stored gas
for major gas suppliers. The first hint that something was amiss at
Mountain Energy came in early October when it notified most of its
large gas customers that it wouldn't be able to supply them at
their contracted-for rate.