Black Elk Energy Offshore Operations, LLC Frequently Asked Questions

Bart M. Schwartz (on behalf of the Receivership Entities) concluded a settlement agreement with the Trustee of the Black Elk Energy Offshore Operations LLC Litigation Trust. You can read the settlement agreement here.


Did the Receiver pay the Black Elk Trustee $29.6 million out of the               Receivership’s current assets? 

No. The Receiver has not paid the Black Elk Trustee anything.  The Black Elk Trustee has two allowed claims against the Receivership estate: one claim for $24.6 million against PPCO, and (if PPLO is added to the Receivership) one claim for $5 million against PPLO. The total amount paid to the Black Elk Trustee on the allowed claims and the timing of any such payment will depend on the total assets available for distribution under the Liquidation Plan and the priority, if any, of the allowed claims as determined by the Court.

Where does the Black Elk allowed claim of $29.6 million stand vis-à-vis other Platinum creditors?

The settlement does not give Black Elk Trustee priority over other creditors. When the Receiver presents his liquidation plan to the Court, the Black Elk Trustee will be allowed to argue to the Court that it should be entitled to priority, although the Receiver (and other stakeholders) will be entitled to oppose that argument. However, the Receiver and the SEC have agreed not to argue that the Black Elk Trustee’s claims should be subordinated to those of other unsecured creditors and investors.

 

Will money the Black Elk Trustee recovers from other sources reduce or offset its allowed claims against PPCO and PPLO?

 No. The Receiver and the SEC agreed not to seek any offset or reduction to the Black Elk Trustee’s allowed claims of $29.6 million.

 

Will other stakeholders be able to object to the Black Elk Trustee’s allowed claims?

 Yes. However, the Receiver and the SEC have agreed to oppose any objections to the Black Elk Trustee’s allowed claims.

 

Can Black Elk recover more from the Receivership Entities than the amount of the allowed claims?

 The Black Elk Trustee has agreed not to seek any money from PPCO and PPLO beyond the $29.6 million allowed claims, and to release PPCO and PPLO from all claims. If there is money left after all other allowed claims have been paid, the Trustee is allowed to seek interest on its allowed claims, and the Receiver and the SEC are entitled to oppose any application for interest.

The Black Elk Trustee has released all claims against the other Receivership Entities and proposed receivership entities except to the extent any of those entities received portions of alleged $47.9 million fraudulent transfers to PPVA or PPVA Black Elk (the “PPVA/PPVABE Transfers”). The Receiver and the SEC are entitled to object to or oppose any such claims.

 

How does the Receivership benefit from the settlement with the Black Elk Trustee?

 The Black Elk Trustee agreed to dismiss all claims against PPCO and take no further action to prosecute claims against PPLO in the Black Elk Adversary Proceeding in Texas, as well as to release PPCO and PPLO from all other claims and causes of action that existed on or before the settlement date. The Black Elk Trustee also agreed to release the other Receivership Entities and proposed receivership entities from all claims except to the extent those entities received portions of the PPVA/PPVABE Transfers. This will allow the Receiver to focus on maximizing recoveries for all creditors and investors, including Black Elk.

 

Will PPLO, as a Black Elk bondholder, participate in any Black Elk recoveries?

 The Black Elk Trustee has agreed not to object to any claims that PPCO or PPLO have filed in the Black Elk bankruptcy. The Receiver agreed to subordinate those claims to other Black Elk creditors. Because of this subordination, it is unlikely that any Receivership Entities will recover any funds from the Black Elk bankruptcy.

 

How does the settlement affect the Black Elk Trustee’s claims against Mark Nordlicht, David Levy, Daniel Small, and Jeff Shulse?

 The settlement does not release any of the Black Elk Trustee’s claims against any of the individual defendants.

 

How does this affect PPVA?

 The settlement does not resolve any of the Black Elk Trustee’s claims against PPVA or PPVA Black Elk.