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Gold/Mining/Energy : ATPG Shareholders
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From: Kramer383/25/2014 9:21:19 PM
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Billy Bilgewasser
everett2

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Summary judgement was denied in NGP's suit against ATP today. The crux of the suit was that NGP provided services to ATP in exchange for a term ORRI that also carried stiff interest penalties should production alone not meet the ROR requirements of the agreement. NGP wanted the suit dismissed because they argued the ORRI was a transfer of real property interests that proceeded the filing and therefore, the BK court had no jurisdiction to encumber the assets of NGP. This is interesting because both ATP and NGP went to great lengths to make the arrangement LOOK like a real property conveyance, but when ATP filed for bankruptcy, they told a much different tale and described the transaction as debt in their BK filing, therefore subject to cancellation under the authority of the BK court. Don't think the industry will forget that little tidbit.

The court ruled that the facts did not support a summary judgement argument of NGP and the case will go to trial. Although the contract was disguised as an ORRI, supposedly a real property transfer of interest prior to the bankruptcy, the overall effect of the contract was to create a debt and was therefore subject to the bankruptcy proceedings. ATP prevailed in this summary judgement decision.

I have long maintained that the term ORRI ATP set up with NGP, Diamond and others for hundreds of millions of dollars were really nothing more than disguised debt instruments. The industry knew it, the parties to the agreement knew it, hell they even reported the deal as a debt on their tax returns. Today, the judge agreed.

mondaq.com
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