Atlantic Maritime v. QuarterNorth Energy
- Case Type:
- Business
- Case Status:
- Reversed and Remanded
- Citation:
- 23-20218 (5th Circuit, Jun 11,2025) Not Published
- Tag(s):
-
- Ruling:
- Reversing the U.S. Bankruptcy and U.S. District Courts for the Southern District of Texas (BC and DC), the U.S. Court of Appeals for the Fifth Circuit (Circuit) deemed that the settlement and satisfaction provisions of the confirmed chapter 11 plan of Fieldwood Energy (DR) did (and could) not extinguish certain statutory privileges under the Louisiana Oil Well Lien Act (LOWLA) held by Atlantic Maritime Services (Atlantic) over non-debtor property, as QuarterNorth Energy (QuarterNorth), DR's substitute plaintiff in the underlying litigation, argued in seeking a declaration to that effect.
- Procedural context:
- After the DR filed for bankruptcy, Atlantic asserted statutory privileged over the property of third-party non-debtors under LOWLA in Louisiana state court. The DR, a non-party to these suits (Louisiana Lawsuits), responded by launching an adversary proceeding to extend the automatic stay to the Louisiana Lawsuits; the BC did so. Later, the DR both filed its plan and amended its adversary complaint both to request a declaration that the satisfaction, settlement, and discharge of Atlantic's claims under the proposed plan would extinguish any privileges held by Atlantic under LOWLA and an accompanying permanent injunction. Atlantic moved to dismiss; the DR moved for summary judgment. Meanwhile, the confirmation process continued. For its part, Atlantic voted to reject the plan and opted out of both of the DR's "non-debtor releases." That is, Atlantic neither granted certain other releases that would have made it into a "Released Party" nor executed a trade agreement that would have waived any and all liens against any DR affiliated person or entity or such person's or entity's respective assets or property but promised a higher recovery under the plan. While the parties' dispositive motions were pending, the BC overruled Atlantic's objection and confirmed the plan. Atlantic declined to appeal that confirmation order. Months later, after hearing arguments in the adversary proceeding, the BC issued a bench order in favor of Atlantic. QuarterNorth, having acquired the DR's assets and thus been substituted for the DR as that proceeding's sole plaintiff, moved for reconsideration based on the BC's incorrect factual findings. Upon review of QuarterNorth's papers, the BC reversed its prior ruling. Atlantic timely appealed.
- Facts:
- As the designated operator for various oil and gas wells, the pre-petition DR hired Atlantic to provide drilling services. Atlantic did so at a cost of over $13 million. Before Atlantic could collect, however, the DR and its affiliates filed the chapter 11 case from which this appeal sprang.
- Judge(s):
- James E. Graves, Jr., and Cory T. Wilson
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