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Full title: Order (I) Approving Settlement Between the Debtors and Castex Energy, Inc.; (II) Authorizing the Sale of Transferred Interests; and (III) Authorizing the Assumption and Assignment of Executory Contracts (Related Doc # 215) Signed on 5/26/2021. (TylerLaws) (Entered: 05/26/2021)

Document posted on May 25, 2021 in the bankruptcy, 7 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

As evidenced by the affidavits of service previously filed with the Court,and based upon the representations of counsel, proper, timely, adequate, and sufficient notice of (i) the Motion, (ii) the Settlement, (iii) the sale (the “Sale”) of the Transferred Interests to CEI, (iv) the assumption and assignment of the Transferred Interests JOAs, (v) the Hearing, and (vi) all deadlines related thereto, has been provided by the Debtors in accordance with sections 102(1), 363, and 365 of the Bankruptcy Code and CEI is a good faith purchaser for value within themeaning of section 363(m) of the Bankruptcy Code with respect to the Sale and the transactions contemplated thereby and by this Sale Order (including, without limitation, in connection with the assumption and assignment of the Transferred Interests JOAs), and is therefore entitled to all of the protections afforded by that provision.As demonstrated by the record of these Chapter 11 Cases, the representations of counsel made on the record at the Hearing and the testimony and other evidence proffered or adduced at the Hearing, and in addition to the other findings set forth in this Order, CEI (i) recognized the Debtors were free to deal with any other party interested in acquiring the Transferred Interests, (ii) disclosed all payments to be made by CEI with respect to the Settlement, the transfer of the Transferred Interests, and the assumption and assignment of the Transferred Interests JOAs, and (iii) has not violated section 363(n) of the Bankruptcy Code by any action or inaction.The Debtors are hereby authorized to and shall, in accordance with sections105(a) and 365 of the Bankruptcy Code (i) assume the Transferred Interests JOAs; (ii) assign the Transferred Interests JOAs to CEI, free and clear of all liens, claims, encumbrances, and other interests of any kind or nature whatsoever; and (iii) execute and deliver to CEI such documents or other instruments as may be necessary to assign and transfer the Transferred Interests JOAs to CEI.the Debtors’ release of CEI, its officers, directors, employeesand agents from any and all claims and causes of action againstCEI arising as a result of or related to CEI’s management ofthe Transferred Interests and Transferred Interests JOAs, otherthan any claims against such parties for the breach of afiduciary duty arising under applicable law, including withoutlimitation, the duties of loyalty and care (the “TransferredInterest Claims”) shall be effective; and v. for the avoidance of doubt, the Transferred Interest Claimsshall not include the Debtors’ claims or causes of action relatedto the Turnover Claims or INC Indemnification Claim and the Parties rights and defenses related thereto shall be expresslypreserved pending the effectiveness of the Settlement as setforth in sub-paragraph b below.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ENTERED 05/26/2021 In re: § § Case No. 21-30710 CASTEX ENERGY 2005 HOLDCO, § LLC, et al., § Chapter 11 § Debtors. § (Jointly Administered) ORDER (I) APPROVING SETTLEMENT BETWEEN THE DEBTORS AND CASTEX ENERGY, INC.; (II) AUTHORIZING THE SALE OF TRANSFERRED INTERESTS; AND (III) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS (Relates to ECF # 215) The Court, having considered the Motion for Entry of an Order: (I) Approving Settlement Between the Debtors and Castex Energy, Inc.; (II) Authorizing the sale of Transferred Interests; and (III) Authorizing the Assumption and Assignment of Executory Contracts (the “Motion”)1 filed by Castex Energy 2005 Holdco, LLC, et al., the above-captioned debtors and debtors in possession (the “Debtors”); having reviewed the Motion, the proposed Settlement and the terms thereof; any objections to the relief requested therein, and with the objection filed by the Prepetition Agent, as representative of the Prepetition Secured Parties [ECF # 240] having been withdrawn and any other objection having been withdrawn or overruled; and based on the matters reflected in the record; finds that good and sufficient cause exists for the granting of the relief requested in the Motion, and after having given due deliberation upon the Motion, the Settlement, and representations regarding the Settlement, and all of the proceedings had before the Court : 1 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion.

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THE COURT HEREBY FINDS AND DETERMINES THAT:2 A. Jurisdiction and Venue. The Court has jurisdiction over the Motion pursuant to28 U.S.C. § 1334, and this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B), (C), (E), (F), (N) and (O). Venue for these Chapter 11 Cases and the Sale Motion is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. B. Notice. As evidenced by the affidavits of service previously filed with the Court,and based upon the representations of counsel, proper, timely, adequate, and sufficient notice of (i) the Motion, (ii) the Settlement, (iii) the sale (the “Sale”) of the Transferred Interests to CEI, (iv) the assumption and assignment of the Transferred Interests JOAs, (v) the Hearing, and (vi) all deadlines related thereto, has been provided by the Debtors in accordance with sections 102(1), 363, and 365 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, 9007, 9011 and 9014 to each party entitled thereto. Such notice was good, sufficient, and appropriate under the circumstances, and no other or further notice of the Motion, the Settlement, the Sale (and the transactions contemplated in connection therewith), the assumption and assignment to CEI of the Transferred Interests JOAs, the Hearing, and all deadlines related thereto is or shall be required. C. Consideration. The consideration (including the assumption of the Debtors’ P&A Obligations related to the Transferred Interests) provided by CEI for the Transferred Interests (i) constitutes (a) reasonably fair and equivalent value and consideration under the Bankruptcy Code and any Uniform Fraudulent Transfer or Conveyance Act, and (b) reasonably equivalent value, fair consideration, fair salable value, and fair value under any such laws as 2 The findings of fact and conclusions of law herein constitute the Court’s findings of fact and conclusions of law for the purposes of Bankruptcy Rule 7052, made applicable pursuant to Bankruptcy Rule 9014. To the extent any findings of facts are conclusions of law, they are adopted as such. To the extent any conclusions of law are findings of fact, they are adopted as such.

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applicable or any other applicable laws of the United States, any state, territory, or possession thereof, or the District of Columbia, and (ii) is fair and reasonable. D. Sale in Best Interests. The relief requested in the Motion, the approval of theSettlement, and consummation of the Sale of the Transferred Interests at this time is in the best interests of the Debtors, their creditors, their estates and other parties in interest. E. Arm’s-Length Sale. The Settlement was negotiated, proposed, and entered intoby the Debtors and CEI without collusion or fraud, in good faith, and from arm’s length bargaining positions. Neither the Debtors, nor CEI, has engaged in any conduct that would cause or permit the Sale of the Transferred Interests and Transferred Interests JOAs to be avoided under section 363(n) of the Bankruptcy Code. CEI has not acted in a collusive manner with any person in connection with any aspect of the Settlement or the Sale. F. Good Faith Purchaser. CEI is a good faith purchaser for value within themeaning of section 363(m) of the Bankruptcy Code with respect to the Sale and the transactions contemplated thereby and by this Sale Order (including, without limitation, in connection with the assumption and assignment of the Transferred Interests JOAs), and is therefore entitled to all of the protections afforded by that provision. As demonstrated by the record of these Chapter 11 Cases, the representations of counsel made on the record at the Hearing and the testimony and other evidence proffered or adduced at the Hearing, and in addition to the other findings set forth in this Order, CEI (i) recognized the Debtors were free to deal with any other party interested in acquiring the Transferred Interests, (ii) disclosed all payments to be made by CEI with respect to the Settlement, the transfer of the Transferred Interests, and the assumption and assignment of the Transferred Interests JOAs, and (iii) has not violated section 363(n) of the Bankruptcy Code by any action or inaction.

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NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: 1. The provisions of the Settlement are approved, and the Debtors are authorized totake any all further actions necessary to effectuate the Settlement. To the extent not withdrawn, settled, or otherwise resolved, any objection(s) to the Motion are hereby overruled. 2. Except as otherwise provided in the Order, the terms of the Settlement TermSheet are incorporated by reference as if fully set forth in this Order. 3. Pursuant to section 363(b) of the Bankruptcy Code, the Debtors are hereby (i)authorized to sell the Transferred Interests to CEI, or its designee, in accordance with the terms of the Settlement Term Sheet; (ii) authorized to transfer and assign all right, title and interest (including common law property rights) to the Transferred Interests; (iii) authorized and directed to execute and deliver, perform under, consummate, implement, and any additional instruments and documents that may be reasonably necessary or desirable to implement the sale and transfer of the Transferred Interests; and (iv) authorized and empowered to take all further actions as may be reasonably requested by CEI for the purpose of assigning, transferring, granting, conveying and conferring the Transferred Assets to CEI, or its designee. 4. Pursuant to sections 363(b) and (f) of the Bankruptcy Code, the TransferredInterests shall be transferred to CEI free and clear of all claims, liens, interests and encumbrances (except as expressly assumed by CEI) of any kind or nature whatsoever, and CEI shall not be responsible for any liens, claims, encumbrances, interests of any kind or nature whatsoever. For the avoidance of doubt, the Transferred Interests shall not be transferred free and clear of the rights of counterparties to the Transferred Interests JOAs, all such rights, be they operator lien or contract rights, shall be maintained by any such operator or contract party. 5. The Debtors are hereby authorized to and shall, in accordance with sections105(a) and 365 of the Bankruptcy Code (i) assume the Transferred Interests JOAs; (ii) assign the

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Transferred Interests JOAs to CEI, free and clear of all liens, claims, encumbrances, and other interests of any kind or nature whatsoever; and (iii) execute and deliver to CEI such documents or other instruments as may be necessary to assign and transfer the Transferred Interests JOAs to CEI. CEI’s assumption of the Transferred Interests JOAs, is hereby approved, and all requirements and conditions under sections 363 and 365 of the Bankruptcy Code for the assumption and assignment of the Transferred Interests JOAs by the Debtors to CEI have been satisfied. 6. CEI is a good faith purchaser of the Transferred Interests and is hereby grantedand is entitled to all of the protections provided to a good faith purchaser under section 363(m) of the Bankruptcy Code. Pursuant to section 363(m) of the Bankruptcy Code, if any or all of the provisions of this Order are hereafter reversed, modified or vacated by a subsequent order of the Court or any other court, such reversal, modification or vacatur shall not affect the validity and enforceability of the Sale or any other sale, transfer or assignment pursuant to the Settlement or Settlement Term Sheet or any obligation or right granted pursuant to the terms of this Order (unless stayed pending appeal prior to the closing date) and, notwithstanding any reversal, modification or vacatur, any sale, transfer or assignment, shall be governed in all respects by the original provisions of this Order. 7. The Sale approved by this Order is not subject to avoidance and neither CEI norany of its affiliates are subject to any recovery of damages, in each case pursuant to section 363(n) of the Bankruptcy Code. Neither CEI nor any of its affiliates violated section 363(n) of the Bankruptcy Code in any respect in connection with the Sale. 8. Notwithstanding Bankruptcy Rule 6004, this Order shall be effective andenforceable immediately upon entry, provided, however, that the Sale and Settlement approved herein and the terms of this Order shall become effective solely as follows:

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a. Sale: Immediately upon entry of this Order: i. the Debtors shall be authorized to and shall effect the transferthe Transferred Interests and Transferred Interests JOAspursuant to paragraphs 3-5 herein; ii. CEI shall assume any and all P&A Obligations of the Debtorsexisting an arising in relation to the Transferred Interests andthe Transferred Interests JOAs pursuant to paragraphs 3-5herein; iii. the automatic stay shall be modified to permit CEI, as to anyproperty other than a Transferred Interest and any JOA otherthan the Transferred Interests JOAs, to net and cross net JIBsagainst revenue to reduce shortfalls under and regarding suchJOAs under which CEI is operator; iv. the Debtors’ release of CEI, its officers, directors, employeesand agents from any and all claims and causes of action againstCEI arising as a result of or related to CEI’s management ofthe Transferred Interests and Transferred Interests JOAs, otherthan any claims against such parties for the breach of afiduciary duty arising under applicable law, including withoutlimitation, the duties of loyalty and care (the “TransferredInterest Claims”) shall be effective; and v. for the avoidance of doubt, the Transferred Interest Claimsshall not include the Debtors’ claims or causes of action relatedto the Turnover Claims or INC Indemnification Claim and the Parties rights and defenses related thereto shall be expresslypreserved pending the effectiveness of the Settlement as setforth in sub-paragraph b below. b. Settlement: Upon the occurrence of the Effective Date (as defined in thePlan) of the Debtors’ Plan, the following provisions of the Settlement shall beeffective, and, as applicable, the Parties shall perform as follows the actionsnecessary to consummate the Settlement: i. The CEI waiver and release of the Debtors from the CEIReleased Claims shall be effective and shall occur without thenecessity of any action by any Party; ii. the Debtors’ release of CEI, its officers, directors, employeesand agents from: (i) any avoidance or recovery action againstCEI under Chapter 5 of the Bankruptcy Code; and (ii) any

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claims and causes of action against CEI arising from or related to the INC Indemnification Claim (collectively with the Transferred Interest Claims, the “Debtor Released Claims") shall be effective without the necessity of any action by any Party, and shall be binding on any trust established under and by confirmation of the Plan; iii. CEI shall make the Settlement Payment not later than five (5)days following the occurrence of the Effective Date, to the Debtors, or any trust established under and by confirmation ofthe Plan (as may be directed by the Court or consented to bythe Parties and the trustee of such trust); and iv. CEI will pay over to the Debtors, or trustee of any trustestablished under and by confirmation of the Plan, with respectto any additional insurance refunds received by CEI arising from cancellation of insurance on or after December 5, 2020,an amount equal to the amount of any refund(s) attributable toinsurance covering properties of CEP and COI that wascancelled; and further, CEI shall reasonably cooperate with theDebtors’ representatives or such trustee in determining of anysuch amounts are owed. 9. This Court retains exclusive jurisdiction with respect to all matters arising from orrelated to the implementation, interpretation, and enforcement of this Order and the Settlement. Signed: ____________________, 2021. Signed: MOcatyo b2e6r, 1270,2 21018 ________ ___________________________________ THE HO NORABLE MARVIN ISGUR UNITED_ S__T_A_T_E__S_ B__A_N__K_R_U__P_T_C_Y__ J_U__D_G__E_ ______ Marvin Isgur United States Bankruptcy Judge

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