BHP Billiton Petroleum, BHP Billiton Petroleum (TxLa Operating), BHP Billiton Petroleum Properties and Petrohawk Energy filed with the U.S. Bankruptcy Court a motion to reconsider, on a limited basis, the cash management order.
The motion explains, “With respect to properties operated by the Debtor, most of BHP’s Interests are in ‘pay’ status such that the Debtor distributes in the ordinary course of business BHP’s proportionate share of production proceeds on a monthly basis (the ‘Pay-Status Proceeds’). However, through late 2016, the Debtors placed at least $8.9 million in production proceeds that are presently due to be distributed to BHP in “suspense” status, and have since improperly held such funds in suspense even after BHP provided evidence that it is entitled to such funds (‘BHP’s Suspended Proceeds’). In the Debtors’ Mineral Interest Payment Motion, the Debtors admitted to holding approximately $14,800,000 in ‘suspended funds’ (the ‘Suspense Funds’). The Debtors state that they will release the Suspense Funds upon receipt of certain satisfactory information from unspecified interest owners.”
In addition, “BHP seeks reconsideration of the Cash Management Order to require segregation of the Suspense Funds pending an adjudication of BHP’s rights in such funds. At this time, BHP does not seek segregation of the Pay-Status Proceeds, but (i) all of BHP’s rights with respect to property that it owns including its proportionate share of production proceeds should be expressly preserved under the final cash management order and (ii) the order should preserve the rights of BHP to seek relief to segregate production proceeds in the event of a dispute with the Debtors.”
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