Shale Daily / NGI The Weekly Gas Market Report / NGI All News Access

New York Bankruptcy Court Gets $2.6M Bid For Norse Assets

A bankruptcy court in New York said Friday that an entity called Any Acquisition LLC has submitted the highest bid, $2.65 million, to purchase most of the assets of two subsidiaries of Norway's Norse Energy Corp. ASA.

Meanwhile, an attorney representing Norse in its lawsuit against Gov. Andrew Cuomo and two state officials over the ongoing regulatory delay for considering high-volume hydraulic fracturing (HVHF) in the state said a hearing on Friday was tough but went well for the plaintiffs, with the state conceding that it can't take forever to make a decision on the practice.

According to documents filed in U.S. Bankruptcy Court for the Western District of New York, Any Acquisition was the highest of three bidders for the assets of Norse Energy Corp. USA and Norse Energy Holdings Inc. The other bids were submitted by entities named 1300 Main Place LLC and MBIA, at $2.5 million and $1,322,500, respectively.

Court records [Case No. 12-13685-CLB] show the assets up for sale include oil and gas leases; royalties; overriding royalties; production payments; net profits interests; carried interests; revisionary interests; fee, mineral or other interests owned in fee, and other interests. Some wells were also slated to be sold.

The Norse subsidiaries entered Chapter 7 bankruptcy last October (see Shale DailyOct. 18, 2013). Norse holds oil and gas leases for about 130,000 net acres in the state's portion of the Marcellus and Utica shales. The lawsuit was filed to motivate the state Department of Environmental Conservation (DEC) to release a supplemental generic environmental impact statement (SGEIS) on HVHF and give value to the leases as part of Norse's bankruptcy (see Shale DailyJuly 31, 2013).

Court records show that the DEC had filed a limited objection to the sale of Norse's assets, but it has since withdrawn that objection.

"We are pleased to advise the court that counsel have agreed upon the insertion of language into the sale order which adequately addresses the state's concerns," Assistant Attorney General Stephen Nagle said in a letter Wednesday to U.S. Bankruptcy Court Judge Carl Bucki. "Based on the modification of the sale order, and contingent upon no material changes to the final sales order, the state withdraws its objection and will not appear at today's hearing."

It was unclear what language was inserted into the sales order. Nagle and DEC spokeswoman Emily DeSantis could not be reached for comment Friday.

In another twist, the court-appointed trustee in the Norse bankruptcy case, Mark Wallach of the Buffalo, NY-based firm Penney, Maier & Wallach, filed a motion last Tuesday through his special counsel to assume control of two of Norse's leases in Dryden, NY. Bucki ordered a hearing on the assumption motion for April 30.

The Dryden leases are at the heart of one of two legal fights in New York over the right for local governments to enact bans on oil and gas activities. Last May, an appellate court surprised the industry and ruled in favor of the towns (see Shale DailyMay 6, 2013). Both cases -- Norse Energy Corp. USA v. Town of Dryden (No. 515227), and Cooperstown Holstein Corp. v. Town of Middlefield (No. 515498) -- are now before the New York Court of Appeals.

Dennis Holbrook, former executive vice president for Norse, told NGI's Shale Daily that Wallach was probably advised to keep the leases in the Norse estate, to help minimize any legal standing issues while the Dryden case played out in court.

"I can't speak for either the trustee or for the potential bidder," Holbrook said Friday. "I didn't have any discussions with them and I don't know their motivation. But I do believe that it's an important legal case, and so I do think it's important for the industry to preserve that case and get a proper decision on it."

Thomas West, an attorney for The West Firm pllc in Albany, NY, who represents Norse in the Dryden case, told NGI's Shale Daily on Friday that "it's not necessary to keep the challenge alive, it would just avoid the need for a substitution motion.

"If the leases were sold to Any Acquisition, they could be substituted in as the successor in interest. But to avoid having to go through that process, we felt that it would be prudent just to leave the leases with the trustee for the time being."

West, who also represents Norse in its lawsuit against Cuomo, DEC Commissioner Joseph Martens and Department of Health Commissioner Nirav Shah, said Friday's hearing in Albany County Supreme Court went well. Judge Roger McDonough heard oral arguments for two lawsuits against the state over the SGEIS delays -- one filed by Norse, the other by the Joint Landowners Coalition of New York Inc. (see Shale DailyMarch 31March 7).

"The judge was tougher on our side than the other side, pushing us very hard on some standing issues and other procedural issues that have been raised by the state," West said. "But he was able to get the state to concede that under the rule of law that the state is advocating, there would be no time limits whatsoever on finalization of the SGEIS. In other words, it could go on indefinitely. That's a bold concession and hopefully one that doesn't sit well with the judge.

"If you have a company with 27 pending permit applications, and 70,000 landowners with mineral rights, and they don't have the right to judicial review because of standing principles or otherwise, it certainly leaves the state government without any checks and balances."

West said McDonough would issue a ruling on both lawsuits.

ISSN © 2577-9877 | ISSN © 1532-1266 | ISSN © 2158-8023

Recent Articles by Charlie Passut

Comments powered by Disqus