HTML Document View

Full title: Emergency Motion Wind-Down Trustee and Liquidation Trustee's Emergency Motion for Entry of an Order Extending the Period to File and Serve Objections to Claims Filed by Norman N Kinel, Scott A. Rinaldi Hearing scheduled for 4/28/2021 at 01:30 PM at telephone and video conference. (Attachments: # 1 Proposed Order) (Moak, Paul) (Entered: 04/16/2021)

Document posted on Apr 15, 2021 in the bankruptcy, 9 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

By this Motion, the Trustees seek entry of the proposed order (the “Order”), substantially in the form attached hereto pursuant to rule 9006(b) of the Federal Rules of Bankruptcy Procedures (the “Bankruptcy Rules”), extending the time to file objections to claims (the “Claims Objection Deadline”) through and including September 5, 2021.Because of the large number of claims in these cases, the Wind-Down Trustee and the Liquidation Trustee sought and were granted approval to file omnibus objections to certain claims in accordance with the procedures set forth in the Order Approving Omnibus Claims Objection Procedures and Filing of Substantive Omnibus Claims Objections [Docket No. 1230]The Reviewing Parties continue to comprehensively review the register of claims (the “Claims Register”) and reconcile scheduled claims and proofs of claim (collectively, the “Claims”) against the Debtors in these chapter 11 cases by persons purporting to be holders of the Claims. Pursuant to Article XI.E of the Plan, the Trustees are required to file objections to Claims on or before the Claims Objection Deadline, which is defined as “the date that is one hundred eighty (180) days after the Effective Date or such later date as may be approved by the Bankruptcy Court.”An extension of the Claims Objection Deadline will ensure that the Trustees complete the reconciliation process, do not unnecessarily forfeit valid defenses to claims, do not expend resources in objecting to claims that could otherwise be resolved consensually, and do not otherwise permit unjustified claims to be allowed.

List of Tables

Document Contents

IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ) In re: ) Chapter 11 ) BJ SERVICES, LLC, et al.,1 ) Case No. 20-33627 (MI) ) Debtors. ) (Jointly Administered) ) WIND-DOWN TRUSTEE AND LIQUIDATION TRUSTEE’S EMERGENCY MOTION FOR ENTRY OF AN ORDER EXTENDING THE PERIOD TO FILE AND SERVE OBJECTIONS TO CLAIMS EMERGENCY RELIEF HAS BEEN REQUESTED. A HEARING WILL BE CONDUCTED ON THIS MATTER ON APRIL 28, 2021 AT 1:30 P.M. IN COURTROOM 404, 4TH FLOOR, 515 RUSK STREET, HOUSTON, TEXAS, 77002. YOU MAY PARTICIPATE IN THE HEARING EITHER IN PERSON OR BY AUDIO/VIDEO CONNECTION. AUDIO COMMUNICATION WILL BE BY USE OF THE COURT’S DIAL-IN FACILITY. YOU MAY ACCESS THE FACILITY AT (832) 917-1510. YOU WILL BE RESPONSIBLE FOR YOUR OWN LONG-DISTANCE CHARGES. ONCE CONNECTED, YOU WILL BE ASKED TO ENTER THE CONFERENCE ROOM NUMBER. JUDGE ISGUR’S CONFERENCE ROOM NUMBER IS 954554. YOU MAY VIEW VIDEO VIA GOTOMEETING. TO USE GOTOMEETING, THE COURT RECOMMENDS THAT YOU DOWNLOAD THE FREE GOTOMEETING APPLICATION. TO CONNECT, YOU SHOULD ENTER THE MEETING CODE “JUDGEISGUR” IN THE GOTOMEETING APP OR CLICK THE LINK ON JUDGE ISGUR’S HOME PAGE ON THE SOUTHERN DISTRICT OF TEXAS WEBSITE. ONCE CONNECTED, CLICK THE SETTINGS ICON IN THE UPPER RIGHT CORNER AND ENTER YOUR NAME UNDER THE PERSONAL INFORMATION SETTING. HEARING APPEARANCES MUST BE MADE ELECTRONICALLY IN ADVANCE OF THE HEARING. TO MAKE YOUR ELECTRONIC APPEARANCE, GO TO THE SOUTHERN DISTRICT OF TEXAS WEBSITE AND SELECT “BANKRUPTCY COURT” FROM THE TOP MENU. SELECT “JUDGES’ PROCEDURES,” THEN “VIEW HOME PAGE” FOR JUDGE ISGUR. UNDER “ELECTRONIC APPEARANCE” SELECT “CLICK HERE TO SUBMIT ELECTRONIC APPEARANCE”. SELECT THE CASE NAME, COMPLETE THE REQUIRED FIELDS AND CLICK “SUBMIT” TO COMPLETE YOUR APPEARANCE. IF YOU OBJECT TO THE RELIEF REQUESTED, OR YOU BELIEVE THAT EMERGENCY CONSIDERATION IS NOT WARRANTED, YOU MUST EITHER APPEAR AT THE HEARING OR FILE A WRITTEN RESPONSE PRIOR TO THE HEARING. OTHERWISE, THE COURT MAY TREAT THE PLEADING AS UNOPPOSED AND GRANT THE REQUESTED RELIEF. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: BJ Services, LLC (3543); BJ Management Services, L.P. (8396); BJ Services Holdings Canada, ULC (6181); and BJ Services Management Holdings Corporation (0481). The Debtors’ service address is: 11211 Farm to Market 2920 Road, Tomball, Texas 77375.

1

Scott A. Rinaldi, in his capacity as Trustee of the BJ Services Wind-Down Trust (the “Wind-Down Trustee”), and as sole representative of the above-captioned debtors (collectively, the “Debtors”), and Norman N. Kinel, in his capacity as Trustee of the BJS Liquidating Trust (the “Liquidation Trustee,” and together with the Wind-Down Trustee, the “Trustees”), respectfully represent the following in support of this motion (the “Motion”): Relief Requested 1. By this Motion, the Trustees seek entry of the proposed order (the “Order”), substantially in the form attached hereto pursuant to rule 9006(b) of the Federal Rules of Bankruptcy Procedures (the “Bankruptcy Rules”), extending the time to file objections to claims (the “Claims Objection Deadline”) through and including September 5, 2021. Jurisdiction, Venue, and Procedural Background 2. The United States Bankruptcy Court for the Southern District of Texas (the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). 3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 4. The statutory bases for the relief requested herein are sections 105(a) and 502(b) of title 11 of the United States Code (the “Bankruptcy Code”) and Bankruptcy Rule 9006(b). 5. On July 20, 2020 (the “Petition Date”), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. On the Petition Date, the Court entered an order [Docket No. 13] granting procedural consolidation and joint administration of these chapter 11 cases pursuant to Bankruptcy Rule 1015(b). No request for the appointment of a trustee or examiner has been made in these chapter 11 cases. On July 28, 2020, the United States Trustee for the Southern District of Texas (the “U.S. Trustee”) appointed an official committee of

2

unsecured creditors pursuant to section 1102 of the Bankruptcy Code (the “Committee”) [Docket No. 199]. 6. A detailed description of the Debtors and their businesses, and the facts and circumstances surrounding the Debtors’ chapter 11 cases, are set forth in greater detail in the Declaration of Warren Zemlak, Chief Executive Officer of BJ Services, LLC, in Support of Chapter 11 Petitions and First Day Motions [Docket No. 22] (the “First Day Declaration”), filed contemporaneously with the Debtors’ voluntary petitions. 7. On November 6, 2020, the Court entered the Order Confirming the Debtors’ Combined Disclosure Statement and Joint First Amended Chapter 11 Plan [Docket No. 1093] (the “Confirmation Order”).2 The effective date for the Debtors’ Joint First Amended Chapter 11 Plan [Docket No. 1084] (the “Plan”) occurred on the same date.3 The Claims Reconciliation Process 8. Under the Plan and the Wind-Down Trust Agreement [Docket No. 1114], the Wind-Down Trustee was appointed sole representative of the Debtors and, on behalf of the Wind-Down Trust, is responsible for (among other things) resolving Administrative, Priority, and Other Secured Claims filed against the Debtors’ estates.4 Under the Plan and the Liquidation Trust Agreement [Docket No. 1119], the Liquidation Trustee, on behalf of the Liquidation Trust, is tasked with, among other things, reconciling and resolving General Unsecured Claims against the Debtors’ estates, including by filing and prosecuting objections to clams as necessary.5 2 The Liquidation Trust Agreement and the Wind-Down Trust Agreement were among the documents contained in the Plan Supplement, which were expressly approved by the Confirmation Order. See Confirmation Order ¶6. 3 See Notice of (A) Entry of Order Confirming the Debtors’ Joint First Amended Chapter 11 Plan and (B) Occurrence of the Effective Date [Docket No. 1101]. 4 See Plan, art. VI(F)(1); Wind-Down Trust Agreement, Art. 2.2. Anthony C. Schnur was originally appointed as Wind-Down Trustee and Scott A. Rinaldi was subsequently appointed Wind-Down Trustee pursuant to Article 2.6 of the Wind Down Trust Agreement. See Docket No. 1264. 5 See Plan, art. VI(F)(1); Liquidation Trust Agreement, Art. 3.3.

3

9. On September 3, 2020, the Debtors filed their respective statements of financial affairs and schedules of assets and liabilities [Docket Nos. 569–576], pursuant to Bankruptcy Rule 1007 and the Order (I) Extending Time to File Schedules of Assets and Liabilities, Schedules of Current Income and Expenditures, Schedules of Executory Contracts and Unexpired Leases, and Statements of Financial Affairs, and (II) Granting Related Relief [Docket No. 271]. 10. On September 2, 2020, the Court entered an Order (I) Setting Bar Dates for Filing Proofs of Claim, Including Requests for Payment Under Section 503(b)(9), (II) Establishing Amended Schedules Bar Date and Rejection Damages Bar Date, (III) Approving the Form of and Manner for Filing Proofs of Claim, Including Section 503(b)(9) Requests, (IV) Approving Notice of Bar Dates, and (V) Granting Related Relief [Docket No. 547] (the “Bar Date Order”) pursuant to which the Court, among other things, established October 2, 2020, at 5:00 p.m. (prevailing Central Time) (the “General Bar Date”), as the deadline for all nongovernmental entities holding or wishing to assert a “claim” (as defined in section 101(15) of the Bankruptcy Code). The deadline for all governmental units asserting a “claim” (as defined in section 101(15) of the Bankruptcy Code) against the Debtors that arose on or prior to the Petition Date to file written proof of such claim was January 19, 2021, at 5:00 p.m. (prevailing Central Time) (the “Governmental Bar Date,” and together with the General Bar Date, the “Bar Dates”). 11. To date, approximately 735 proofs of claim have been filed against the Debtors, totaling over $940 million in the aggregate. Because of the large number of claims in these cases, the Wind-Down Trustee and the Liquidation Trustee sought and were granted approval to file omnibus objections to certain claims in accordance with the procedures set forth in the Order Approving Omnibus Claims Objection Procedures and Filing of Substantive Omnibus Claims Objections [Docket No. 1230] (the “Objection Procedures”). The Wind-Down Trustee and his

4

advisors (collectively, the “Wind-Down Reviewing Parties”) and the Liquidation Trustee and his advisors (collectively, the “Liquidation Reviewing Parties,” and together with the Wind-Down Reviewing Parties, the “Reviewing Parties”), have been working diligently to review the Claims, including any supporting documentation filed therewith. The Reviewing Parties continue to comprehensively review the register of claims (the “Claims Register”) and reconcile scheduled claims and proofs of claim (collectively, the “Claims”) against the Debtors in these chapter 11 cases by persons purporting to be holders of the Claims. The Reviewing Parties, however, require more time to complete their review of the Claims Register and wind down the claim-review process in these chapter 11 cases in an orderly and efficient manner. Basis for Relief 12. Pursuant to Article XI.E of the Plan, the Trustees are required to file objections to Claims on or before the Claims Objection Deadline, which is defined as “the date that is one hundred eighty (180) days after the Effective Date or such later date as may be approved by the Bankruptcy Court.” Art. I.A.22. Accordingly, because the Effective Date of the Plan was November 6, 2020, the Trustees are required to file objections to Claims by no later than May 5, 2021, absent an extension of such deadline. The Plan also provides that the Court may extend the Claims Objection Deadline. See Plan, Art. I.A.22; XI.E. Moreover, section 105(a) of the Bankruptcy Code provides that the Court may issue any order that is necessary or appropriate to carry out the provisions of the Bankruptcy Code. 13. Pursuant to Bankruptcy Rule 9006(b)(1), “when an act is required or allowed to be done at or within a specified period . . . by order of the court, the court for cause may at any time in its discretion . . . with or without motion or notice order the period enlarged if the request therefore is made before the expiration of the period originally prescribed . . .” Given the

5

circumstances, the Trustees respectfully submit that cause exists to extend the Claims Objection Deadline until and including September 5, 2021, which will not have a materially adverse impact on creditors or other judicial proceedings. 14. As mentioned above, the Claims Register reflects that approximately 735 proofs of claim were filed in the Debtors’ bankruptcy cases. The Reviewing Parties are (and have been) working diligently to review, analyze, and resolve these claims and, in many cases, have been able to resolve or satisfy these claims. However, the review, analysis, and resolution of such a significant amount of claims is a lengthy and time-consuming process. 15. The Trustees have acted in good faith throughout this process, and the Debtors respectfully submit that the need for an extension is justified in the circumstances. The Wind-Down Reviewing Parties have reviewed more 237 claims that were filed in the chapter 11 cases. Approximately 147 secured, administrative, or priority claims have been allowed, satisfied, withdrawn, objected to, or otherwise resolved (approximately 62% by number and 78% by dollar amount of the secured, administrative, or priority claims that were originally asserted against or scheduled by the Debtors). As of the date hereof, approximately 90 total secured, administrative, or priority claims remain on the Claims Register. 16. The Liquidation Reviewing Parties have reviewed more than 644 general unsecured claims that were filed in the chapter 11 cases. Approximately 172 general unsecured claims have been allowed, satisfied, withdrawn, objected to, or otherwise resolved (approximately 26.7% by number and 65.24% by dollar amount of the general unsecured claims that were originally asserted against the Debtors). As of the date hereof, approximately 472 general unsecured claims remain on the Claims Register.

6

17. Claims remain on the Claims Register (the “Remaining Claims”) largely due to the large number of overall claims originally asserted, and the factual and legal complexities associated with certain claims. Rather than haphazardly object to claims merely to satisfy the original Claims Objections Deadline, the Trustees believe it is in the best interests of the Debtors’ estates to continue their diligent review and reconciliation process. 18. If the Claims Objection Deadline is not extended, both the Trustees and the estates’ creditors will be highly prejudiced. An extension of the Claims Objection Deadline will ensure that the Trustees complete the reconciliation process, do not unnecessarily forfeit valid defenses to claims, do not expend resources in objecting to claims that could otherwise be resolved consensually, and do not otherwise permit unjustified claims to be allowed. Allowing the Remaining Claims before the completion of the reconciliation process would likely result in windfalls for those particular claimants and unjustly dilute the recoveries of creditors with valid claims. 19. Similar relief has been granted by courts in this district. See, e.g., iHeartMedia, Inc., Case No. 18-31274 (MI) (Bankr. S.D. Tex. Jul. 16, 2019) (extending the claim objection deadline three times); In re CJ Holdings, Co., No. 16-33590 (DRJ) (Bankr. S.D. Tex. Oct. 10, 2017) (extending the claim objection deadline by 120 days); In re Linn Energy, LLC, No. 16-60040 (DRJ) (Bankr. S.D. Tex. Sept. 6, 2017) (extending the claim objection deadline by 90 days); In re Midstates Petroleum Co., Inc., No. 16-32237 (DRJ) (Bankr. S.D. Tex. Feb. 7, 2017) (same).6 20. Pursuant to the Plan, the Court has the express authority to extend the Claim Objection Deadline. Further, Bankruptcy Rule 9006(b) provides that the Court may “for cause shown at any time in its discretion” extend a deadline “if the request therefore is made before the 6 Because of the voluminous nature of the orders cited herein, such orders are not attached to the Motion. Copies of these Orders are available at the request of the Trustees’ counsel.

7

expiration” of such deadline. Fed. R. Bankr. P. 9006(b)(1). “The federal courts are vested with inherent power ‘to manage their own affairs so as to achieve the orderly and expeditious disposition of cases[,]’ ... includ[ing] the power of the court to control its docket[.]” United States v. Colomb, 419 F.3d 292, 299 (5th Cir. 2005) (quoting Woodson v. Surgitek, Inc., 57 F.3d 1406, 1417 (5th Cir. 1995)). 21. Accordingly, the Trustees respectfully submit that an extension of the Claims Objection Deadline through and including September 5, 2021, is appropriate. Notice 22. Notice of the hearing on the relief requested in this Motion will be provided in accordance and compliance with Bankruptcy Rules 4001 and 9014, as well as the Local Rules, and is sufficient under the circumstances. Without limiting the forgoing, due notice was afforded, whether by facsimile, electronic mail, overnight courier or hand delivery, to parties in interest, including: (a) the Office of the U.S. Trustee for the Southern District of Texas; (b) the administrative agent under the Debtors’ prepetition asset-based revolving credit facility and counsel thereto; (c) the administrative agent under the Debtors’ prepetition term loan facility and counsel thereto; (d) the administrative agent under the Debtors’ prepetition real estate loan and counsel thereto; (e) the United States Attorney’s Office for the Southern District of Texas; (f) the Internal Revenue Service; (g) the Environmental Protection Agency and similar state environmental agencies for states in which the Debtors conduct business; (h) the state attorneys general for states in which the Debtors conduct business; (i) the United States Securities and Exchange Commission; and (j) any party that has requested notice pursuant to Bankruptcy Rule 2002. The Trustees submit that, in light of the nature of the relief requested, no other or further notice need be given.

8

WHEREFORE, the Trustees respectfully request that the Court enter the Order, substantially in the form filed with this Objection, granting the relief requested herein and such other and further relief as is just and equitable. Houston, Texas April 16, 2021 /s/ Paul D. Moak /s/ Travis A. McRoberts GRAY REED & McGRAW LLP SQUIRE PATTON BOGGS (US) LLP Jason S. Brookner (TX Bar No. 24033684) Travis A. McRoberts Paul D. Moak (TX Bar No. 00794316) 2000 McKinney Avenue, Suite 1700 Amber M. Carson (TX Bar No. 24075610) Dallas, TX 75201 1300 Post Oak Boulevard, Suite 2000 Telephone: (214) 758-1500 Houston, Texas 77056 Facsimile: (214) 758-1550 Telephone: (713) 986-7127 Email: travis.mcroberts@squirepb.com Facsimile: (713) 986-5966 Email: jbrookner@grayreed.com Counsel to Norman N. Kinel, as Liquidation pmoak@grayreed.com Trustee of the BJS Liquidating Trust acarson@grayreed.com Counsel to Scott A. Rinaldi, Trustee of the BJ Services Wind-Down Trust Certificate of Service I certify that on April 16, 2021, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas. /s/ Paul D. Moak Paul D. Moak

9