Case 16-60040 Document 1015 Filed in TXSB on 09/23/16 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS VICTORIA DIVISION In re: LINN ENERGY, LLC, et. al., 1 Debtors. Chapter 11 Case No. 16-60040 (DRJ) Jointly Administered EMS USA, INC. S APPLICATION FOR ALLOWANCE AND PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM EMS USA, Inc. ( EMS ), a utilities provider and party-in-interest in the above the above-captioned jointly administered bankruptcy cases ( Bankruptcy Case ), hereby files this Application for Allowance and Payment of Administrative Expense Claim (the Application ). In support of its Application, EMS respectfully states as follows: I. JURISDICTIONS AND VENUE 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334. 2. This matter concerns the administration of this bankruptcy estate; accordingly, it is a core proceeding pursuant to 28 U.S.C. 157(b)(2). 1 The Debtors in the Bankruptcy Case and the last four digits of each Debtor s federal tax identification number are as follows: Linn Energy, LLC (7591); Berry Petroleum Company, LLC (9387); LinnCo, LLC (6623); Linn Acquisition Company, LLC (4791); Linn Energy Finance Corp. (5453); Linn Energy Holdings, LLC (6517); Linn Exploration & Production Michigan LLC (0738); Linn Exploration Midcontinent, LLC (3143); Linn Midstream, LLC (9707); Linn Midwest Energy LLC (1712); Linn Operating, Inc. (3530); Mid-Continent I, LLC (1812); Mid-Continent II, LLC (1869); Mid-Continent Holdings I, LLC (1686); Mid-Continent Holdings II, LLC (7129). The Debtors principal offices are located at JPMorgan Chase Tower, 600 Travis, Suite 5100, Houston, Texas 77002. EMS USA, INC. S APPLICATION FOR ALLOWANCE 1 AND PAYMENT OF ADMINSTRATIVE CLAIM {HD080516.1} Claim Number: 7751
Case 16-60040 Document 1015 Filed in TXSB on 09/23/16 Page 2 of 5 3. Venue in this district is proper pursuant to 28 U.S.C. 1408 and 1409. The predicates for the relief requested in this Application are 11 U.S.C. 503(b) and 507(a). II. FACTUAL BACKGROUND 4. On May 11, 2016 (the Petition Date ), each of the Debtors filed a voluntary petition for relief under chapter 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code ). 5. After the Petition Date, one of the Debtors, Linn Operating, Inc. ( Linn Operating ), entered into that certain Master Service Agreement with EMS, dated June 27, 2016 (the MSA ). 6. Pursuant to the MSA, EMS furnished goods, services and personnel for the performance related to three separate work orders (collectively, the Work Orders ) for Linn Operating s Tuttle, Oklahoma pipeline project (the Pipeline Project ) II. THE ATTEMPTED TERMINATION OF THE WORK ORDERS 7. Pursuant to Section 15.3 of the MSA, the Work Orders may be terminated for cause (a For Cause Termination ), based on the material breach of the MSA, after written notice from Linn Operating giving EMS ten (10) days to cure such defaults (a Cure Notice ). 8. Alternatively, pursuant to Section 15.1 of the MSA, Work Orders may be terminated without cause (a Convenience Termination ). In a Convenience Termination, the MSA obligates Linn Operating to pay EMS both (a) for all work properly performed before termination (the Previous Work ), and (b) for all documented direct expense (excluding EMS USA, INC. S APPLICATION FOR ALLOWANCE 2 AND PAYMENT OF ADMINSTRATIVE CLAIM {HD080516.1}
Case 16-60040 Document 1015 Filed in TXSB on 09/23/16 Page 3 of 5 overhead or profit) reasonably and necessarily incurred by EMS in the demobilization of its goods and personnel with respect to the Work Orders ( the Convenience Termination Expenses ). EMS USA, INC. S APPLICATION FOR ALLOWANCE 3 AND PAYMENT OF ADMINSTRATIVE CLAIM {HD080516.1} 9. On August 5 and August 8, 2016, Linn Operating attempted to terminate the Work Orders, for cause, pursuant to emails from Linn Energy to EMS (the Termination Notices ). The Termination Notices were not preceded, however, with a Cure Notice in compliance with the MSA, as explained in a response email from Alexander J. Buehler, EMS s President & CEO, dated August 9, 2016. Copies of the Termination Notices and Mr. Buehler s response are collectively attached as Exhibit 1. 10. Because the Work Orders were not terminated for cause in compliance with Section 15.3 of the MSA, EMS is entitled to treat the termination as a Convenience Termination under Section 15.1 of the MSA. 11. EMS has calculated the Convenience Termination Expenses as $266,163.00, as reflect on the invoice attached as Exhibit 2 (the Convenience Termination Invoice ). The Convenience Termination Invoice does not include amounts previously invoiced by EMS for the Previous Work. III. ARGUMENT & AUTHORITY 12. By this Application EMS respectfully requests allowance and payment of its administrative expense claim for the Convenience Termination Expenses, in the aggregate amount of $266,163.00. 13. The Convenience Termination Expenses should be afforded administrative expense priority for a number of reasons.
Case 16-60040 Document 1015 Filed in TXSB on 09/23/16 Page 4 of 5 14. First, the Convenience Termination Expenses were incurred under a post-petition contract, the MSA and Work Orders. Although bankruptcy courts have power to impair obligation of prepetition contracts, they do not have power to impair postpetition contracts. Walter's Disposal Service, Inc. v. Atterbury, 73 B.R. 6, 9 (Bankr. E.D. Mo. 1986); 15. Second, the Convenience Termination Expenses are actual and necessary expenses, and exclude EMS s overhead and profit. Finally, EMS s work the Pipeline Project had an actual, concrete benefit to the estate, and EMS could not have performed that work without incurring the mobilization expenses it seeks to recover in this Application. 16. Pursuant to 507(a)(2) of the Bankruptcy Code, the Convenience Termination Expenses constitute priority administrative expenses allowed under 503(b) of the Bankruptcy Code. WHEREFORE, EMS USA, Inc. respectfully requests the Court (a) approve this Application, (b) allow EMS USA, Inc. s 503(b) claim in the amount of $266,163.00, (c) order the Debtors to deliver to EMS USA, Inc. $266,163.00 to satisfy Linn Operating s Convenience Termination Expenses, and (d) grant any other and further relief the Court deems equitable and just. Dated: September 23, 2016. EMS USA, INC. S APPLICATION FOR ALLOWANCE 4 AND PAYMENT OF ADMINSTRATIVE CLAIM {HD080516.1}
Case 16-60040 Document 1015 Filed in TXSB on 09/23/16 Page 5 of 5 Respectfully submitted, OF COUNSEL: /s/ Lara D. Pringle Lara D. Pringle State Bar No. 24056164 Amy Anderson State Bar No. 24077064 1001 Fannin, Suite 2450 Houston, Texas 77002 Telephone: (713) 437-1811 Facsimile: (713) 437-1810 lpringle@joneswalker.com anaderson@joneswalker.com ELIZABETH J. FUTRELL (#05863) MARK A. MINTZ (#31878) 201 St. Charles Avenue, 51st Floor New Orleans, Louisiana 70170 Telephone: (504) 582-8000/ Direct: (504) 582-8194 Direct Facsimile: (504) 589-8194 Email: efutrell@joneswalker.com Email: mmintz@joneswalker.com COUNSEL FOR EMS USA, INC. JONES WALKER CERTIFICATE OF SERVICE The undersigned hereby certifies that, on September 23, 2016, a true and correct copy of the foregoing document was served on the Trustee and all parties receiving notice in this Bankruptcy Case via CM/ECF notification. /s/ Lara D. Pringle Lara D. Pringle EMS USA, INC. S APPLICATION FOR ALLOWANCE 5 AND PAYMENT OF ADMINSTRATIVE CLAIM {HD080516.1}
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Case 16-60040 Document 1015-3 Filed in TXSB on 09/23/16 Page 1 of 1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS VICTORIA DIVISION In re: LINN ENERGY, LLC, et. al., 1 Debtors. Chapter 11 Case No. 16-60040 (DRJ) Jointly Administered ORDER GRANTING EMS USA, INC. S APPLICATION FOR ALLOWANCE AND PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM The Court has considered EMS USA, Inc. s Application for Allowance and Payment of Administrative Expense Claim ( Application ). After consideration of the Application and any responses filed thereto, the Court finds that notice of the Application is proper, that the Application is well-founded, and that based on the facts, EMS USA, Inc. is entitled to the relief sought. THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that, the Application is GRANTED, and it is further ORDERED that EMS USA, Inc. has an allowed administrative claim pursuant to 11 U.S.C. 503(b) in the amount of $266,163.00. IT IS SO ORDERED. X X X X 1 The Debtors in the Bankruptcy Case and the last four digits of each Debtor s federal tax identification number are as follows: Linn Energy, LLC (7591); Berry Petroleum Company, LLC (9387); LinnCo, LLC (6623); Linn Acquisition Company, LLC (4791); Linn Energy Finance Corp. (5453); Linn Energy Holdings, LLC (6517); Linn Exploration & Production Michigan LLC (0738); Linn Exploration Midcontinent, LLC (3143); Linn Midstream, LLC (9707); Linn Midwest Energy LLC (1712); Linn Operating, Inc. (3530); Mid-Continent I, LLC (1812); Mid-Continent II, LLC (1869); Mid-Continent Holdings I, LLC (1686); Mid-Continent Holdings II, LLC (7129). The Debtors principal offices are located at JPMorgan Chase Tower, 600 Travis, Suite 5100, Houston, Texas 77002. EMS USA, INC. S APPLICATION FOR ALLOWANCE 1 AND PAYMENT OF ADMINSTRATIVE CLAIM {HD080516.1}