in the united states bankruptcy court for the district of delaware mte … › public › x041 ›...

LEGAL02/39882179v3

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

IN RE: § Chapter 11 § MTE HOLDINGS LLC, et al.,1 § Case No. 19-12269 (CSS) § § Debtors. § (Jointly Administered)

FULCRUM CREDIT PARTNERS LLC’S NOTICE OF PERFECTION AND CONTINUATION OF LIENS PURSUANT TO 11 U.S.C. § 546(b)

PLEASE TAKE NOTICE that Fulcrum Credit Partners LLC (“Fulcrum”), by and through

the undersigned counsel, hereby gives notice pursuant to 11 U.S.C. § 546(b) of its intent to

maintain, perfect and/or enforce its statutory mineral liens filed in accordance with Texas law

against the Debtors MDC Energy, LLC d/b/a MDC Texas Energy LLC, MDC Texas Operator,

LLC, and/or MDC Reeves Energy, LLC (the “Debtors”), and in support of such notice, Fulcrum

states as follows:

1. Fluid Delivery Solutions, LLC (“FDS”) is a company that furnished services and materials

(the “Services”) used in the Debtors’ drilling, operating, completing, maintaining, or repairing of

oil and gas wells, lands and oil and gas leases, commencing in 2017 and continuing through 2019

and relating to various leases located in Reeves County, Texas (the “Leases”). FDS provided the

Services from August 17, 2017 through September 25, 2019 pursuant to a single Master Services

Supply Contract (“MSA”) between FDS and certain of the Debtors dated January 10, 2017.

1 The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtor’s federal tax identification number, are: MTE Holding LLC (7894); MTE Partners LLC (1158); Olam Energy Resources I LLC (0770); MDC Energy LLC (9140); MDC Texas Operator LLC (1087); Ward I, LLC (6817); and MDC Reeves Energy LLC (3644). The Debtors’ address is 280 East 96th Street, Suite 210, Indianapolis, Indiana 46240.

Case 19-12269-CSS Doc 1230 Filed 07/01/20 of 5

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2. Under applicable state law (Texas Property Code § 56.001 et seq.), FDS obtained the

following prepetition statutory mineral liens (the “Mineral Liens”) with respect to the Leases set

forth below to secure unpaid amounts for Services provided to the Debtors:

Lease Amount Instrument

Affirmed 6 / American Pharoah / State California Chrome / Copperhead 23 / Coopers Dream 23 / Count Fleet / Rocket Wrangler / Imperial Eagle 24 / Omaha 11 / Pickpocket 21 / Seattle Slew 17 / Toyah B / War Admiral / Repent / Ghost / Whirlaway 24 / Yucca

$3,512,753.79, plus interest and attorneys’ fees

2019020392

State California Chrome 27 $412,107, plus interest and attorneys’ fees

2019019871

Count Fleet / Rocket Wrangler $15,275, plus interest and attorneys’ fees

2019019872

Imperial Eagle 24 $109,965, plus interest and attorneys’ fees

2019019873

Omaha 11 $1,850, plus interest and attorneys’ fees

2019019874

War Admiral / Repent / Ghost $615,146, plus interest and attorneys’ fees

2019019875

Whirlaway 24 $153,130, plus interest and attorneys’ fees

2019019876

3. On December 13, 2019, after providing notice, FDS filed Mineral Lien Affidavits (the

“Lien Affidavits”) in the County of Reeves, Texas, asserting its rights under the Texas Property

Code and the Texas Constitution, in each case within the statutory time limits to perfect a valid

mineral lien. Copies of the Lien Affidavits are attached as Exhibits 1 through 7 and are

incorporated herein by reference. Pursuant to the statutory mineral lien laws of Texas (TEX.

PROP. CODE §56.001, et seq.), said Lien Affidavits perfected the Mineral Liens, which relate

back to commencement of services by FDS in August 2017.

4. The Mineral Liens attach to and encumber the following assets (collectively, the

“Collateral Properties”): (i) the material, machinery and supplies furnished by FDS; (ii) the land,


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leasehold, oil or gas well, water well, oil or gas pipeline and its right-of-way, and lease for oil and

gas purposes for which the services were provided; (iii) all buildings and appurtenances on the

property; (iv) other material, machinery, and supplies used for mineral activities and owned by the

property owner; (v) all other wells and pipelines used in operations related to oil, gas and minerals

and located on the property; and (vi) the proceeds from the sale thereof and any other property

provided for under Texas law. See TEX. PROP. CODE § 56.003; Abella v. Knight Tools, 945 S.W.2d

847 (Tex. App.-Houston [1st Dist.] 1997, no writ).

5. On January 24, 2020, for good and valuable consideration, Fulcrum purchased and was

assigned right, title, benefit, and interest in and to all pre-petition claims (including all lien claims)

held by FDS against Defendant MDC, MDC Texas Operator and MDC Reeves. Fulcrum is

assignee of the Mineral Liens pursuant to that certain Assignment of Liens between Fulcrum and

FDS dated January 24, 2020 and filed with the County Clerk of Reeves County, Texas.

6. The principal amount due and owing to Fulcrum by the Debtors for unpaid Services

rendered through the Petition date is not less than $3,512,753.79, exclusive of interest, costs and

attorneys’ fees. Additionally, Fulcrum asserts a claim for attorneys’ fees and interest on all unpaid

amounts to the fullest extent permitted by applicable bankruptcy and non-bankruptcy law.

7. The Mineral Liens and all associated rights and interests of Fulcrum in the Collateral

Properties arose before the Petition Date and were properly perfected under applicable Texas law.

Thus, the Mineral Liens and all associated rights and interests are unavoidable under Section

546(b)(2) of Title 11 of the United States Code (the “Bankruptcy Code”).

8. The Texas Property Code requires commencement of suit to foreclose on a lien within two

years after the last day a claimant may file the lien affidavit or within one year after completion,


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termination, or abandonment of the work under the original contract under which the lien is

claimed, whichever is later. TEX. PROP. CODE § 56.041, 53.158.

9. Bankruptcy Code Section 546(b)(2) provides that when applicable law requires seizure of

property or commencement of an action to accomplish perfection, or maintenance, or continuation

of perfection, of an interest in the property, the claimant may file a notice with the Bankruptcy

Court in lieu of such seizure or commencement.

10. Pursuant to Bankruptcy Code § 546(b)(2), Fulcrum hereby provides notice to the Debtors,

the Debtors’ counsel, the Office of the United States Trustee, and all parties requesting notice of

Fulcrum’s rights as a perfected lienholder pursuant to Texas mineral lien law including Chapter

56 of the Texas Property Code, and also Fulcrum’s claimed Texas Constitutional Lien on the

Collateral Properties under Article 16, Section 27 of the Texas Constitution. Fulcrum further

provides this notice in lieu of commencement of an action or actions to preserve, perfect, maintain

and continue perfection of the interest of Fulcrum in the Collateral Properties pursuant to section

546(b)(2) of the Bankruptcy Code, including but not limited to the filing of a lawsuit to enforce

and/or foreclose on the Mineral Liens, to preserve, perfect, maintain, and continue its lien rights

for Services provided to the Debtors under Texas state law. Fulcrum intends to enforce its statutory

lien rights to the fullest extent permitted by applicable law.

11. Fulcrum reserves all rights under 11 U.S.C. § 362(b)(3) and affirmatively asserts that all

parties in interest are estopped from claiming that any filing was not commenced in a timely

manner under Texas law insofar as this notice was filed and served within the time required by the

Texas Property Code and §546(b)(2) of the Bankruptcy Code.

12. The filing of this notice shall not be construed as an admission that any filing is required

under the Bankruptcy Code, the application of Texas mineral lien law, and/or any other applicable


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law. Additionally, Fulcrum hereby makes no admission of fact or law and asserts that its lien is

senior to and affective against entities that may have acquired rights on the Collateral Properties

previously, and reserves all rights to amend or/or supplement this Notice.

Fulcrum also hereby gives notice that all proceeds of any sale of the Collateral Properties

securing the Mineral Liens constitute cash collateral under 11 U.S.C. § 363(a) and may not be used

unless each entity that has an interest in such cash collateral consents. Fulcrum does not consent

to the use of its cash collateral, and by this notice and applicable law, demands adequate protection

of its interests in the Collateral Properties under Bankruptcy Code sections 363 and 364.

Respectfully submitted, Dated: July 1, 2020 BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP

By: /s/ Gregory W. Werkheiser Gregory W. Werkheiser (DE No. 3553) 1313 North Market St., Suite 1201 Wilmington, DE 19899 Telephone: (302) 442-7075 Facsimile: (302) 442-7012 Email: [email protected] And ALSTON & BIRD LLP Diane C. Stanfield (CA No. 106366)* 333 S. Hope Street, 16th Floor Los Angeles, CA 90071 Telephone: (213) 576-1000 Facsimile: (213) 576-1100 Email: [email protected] * Motion for pro hac admission to be filed Counsel to Fulcrum Credit Partners LLC


mailto:[email protected]

Exhibit 1

Case 19-12269-CSS Doc 1230-1 Filed 07/01/20 Page 1 of 451

Exhibit 2


Exhibit 3


Exhibit 4


Exhibit 5


Exhibit 6


Exhibit 7


LEGAL02/39882179v3

CERTIFICATE OF SERVICE

I, Gregory W. Werkheiser, hereby certify that a true and correct copy of Fulcrum Credit

Partners LLC’s Notice of Perfection and Continuation of Liens Pursuant to 11 U.S.C. § 546(b) was served

on July 1, 2020 via CM/ECF on all parties registered to receive notice in this case and via first class U.S.

Mail, postage pre-paid upon the following parties:

MDC ENERGY LLC Attention: Mark Siffin Director and CEO 280 East 96th Street, Suite 210 Indianapolis, IN 46240

MORRIS, NICHOLS, ARSHT & TUNNELL LLP Robert J. Dehney, Esquire Eric D. Schwartz, Esquire Daniel Butz, Esquire 1201 N. Market Street, 16th Floor Wilmington, DE 19899-1347

KASOWITZ BENSON TORRES LLP Andrew K. Glenn, Esquire Matthew B. Stein, Esquire David J. Mark, Esquire 1633 Broadway New York, NY 10019

MDC TEXAS OPERATOR LLC Attention: Mark Siffin Director and CEO 280 East 96th Street, Suite 210 Indianapolis, IN 46240

MDC REEVES ENERGY LLC Attention: Mark Siffin Director and CEO 280 East 96th Street, Suite 210 Indianapolis, IN 46240

NATIXIS, NEW YORK BRANCH Attention: Hana Beckles, Director 1251 Avenue of the Americas, 5th Floor New York, NY 10020

NATIXIS, NEW YORK BRANCH Attention: Frederic Bouley, Vice President 1251 Avenue of the Americas, 5th Floor New York, NY 10020

NATIXIS, NEW YORK BRANCH Attention: Wilbert Velazquez Vice President / Letter of Credit Manager Global Finance Operations 1251 Avenue of the Americas, 5th Floor New York, NY 10020

NATIXIS, NEW YORK BRANCH Attention: Urs B. Fischer Executive Director 333 Clay Street, Suite 3900 Houston, TX 77002

NATIXIS, NEW YORK BRANCH Attention: Frederic Bouley, Vice President 333 Clay Street, Suite 3900 Houston, TX 77002


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NATIXIS, NEW YORK BRANCH Attention: Urs Fischer, Executive Director 1251 Avenue of the Americas, 5th Floor New York, NY 10020

BRACEWELL LLP William A. (Trey) Wood III, Esquire 711 Louisiana Street, Suite 2300 Houston, TX 77002

BRACEWELL LLP Mark E. Dendinger, Esquire CityPlace I, 34th Floor 185 Asylum Street Hartford, CT 06103

BRACEWELL LLP David J. Ball, Esquire David R. Kolker, Esquire Finney Abraham, Esquire 1251 Avenue of the Americas 49th Floor New York, NY 10020

BAYARD, P.A. Erin R. Fay, Esquire Daniel N. Brogan, Esquire 600 N. King Street, Suite 400 Wilmington, DE 19801

/s/ Gregory W. Werkheiser Gregory W. Werkheiser (DE No. 3553)


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