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Chapter 11
Case No.: 15-13441 (JNF)
Case 15-13441
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affiliates; (iv) Brett Buckingham, the son of Darryl Buckingham; and (v) Dennis Buckingham,
the brother of Darryl Buckingham and director of numerous of the Debtors apparent affiliates
(collectively, the Related Individuals).
The proposed examinations and document requests are necessary to evaluate the true
extent of the Debtors assets and liabilities. In further support of this motion, the Chapter 11
Trustee respectfully states as follows:
Relevant Factual and Procedural Background
A. Procedural Background
1.
On September 1, 2015 (the Petition Date), Buckingham Oil Interests, Inc. (the
Debtor) filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (the
Chapter 11 Case) in this Court.
2.
On the Petition Date, the United States Trustee (the U.S. Trustee) moved, with
the assent of the Debtor, for an order directing the appointment of a Chapter 11 trustee. [Docket
No. 2].
3.
On September 1, 2015, the Court entered an order authorizing the United States
Trustee to appoint a Chapter 11 trustee to conduct the Debtors business. [Docket No. 4].
4.
On September 1, 2015, the U.S. Trustee filed the Application for and Certificate
On September 15, 2015, the Court entered an order approving the appointment of
The Debtor is in the business of oil and gas exploration and production. The
Debtor was incorporated in Texas, but its headquarters are located in Falmouth, Massachusetts.
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Since at least 2005, the Debtor has acquired a fairly extensive portfolio of working interests in
approximately 100 tracts of land or prospects in eleven (11) different states, including Texas
and Louisiana. Within each prospect, the Debtors operating partners (referred to as operators)
may drill several wells in an effort to discover oil or gas that can be produced in commercial
quantities. Although the Chapter 11 Trustee has not yet concluded his review of the Debtors oil
and gas assets, it appears that the Debtor currently owns a working interest in as many as 300
individual wells.
7.
As the Court is aware, the Debtors bankruptcy filing was precipitated by the
death of the companys founder, Darryl Buckingham. Because Darryl Buckingham conducted
most of the Debtors business affairs personally, very few people outside of the Related
Individuals have such knowledge. The Chapter 11 Trustee has worked closely with the Debtors
remaining employees to understand the nature and extent of Buckinghams operations and has
had numerous discussions with parties that invested (directly or indirectly) in the Debtors oil
and gas prospects pre-petition.
8.
Based on this initial investigation, it has become evident to the Chapter 11 Trustee
that numerous other related entities were organized by Darryl Buckingham or on his behalf.
These Affiliates, it appears, may have been run in some respects as a single enterprise with the
Debtor. Moreover, the Chapter 11 Trustee suspects that misdirection, misapplication, and/or
mismanagement of funds may have occurred between the Debtors Affiliates and/or the Related
Individuals.
Relief Requested
9.
Procedure 2004, authorizing him to conduct examinations of, and to compel the production of
documents from, the Affiliates and Related Individuals.
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Rule 2004 of the Federal Rules of Bankruptcy Procedure provides that upon
motion of any party-in-interest, the Court may order the examination of any entity. Fed. R.
Bankr. P. 2004(a). Such an examination may relate to the acts, conduct, or property or to the
liabilities and financial condition of the debtor, or to any matter which may affect the
administration of the debtors estate.... Fed. R. Bankr. P. 2004(b). Moreover, the scope of such
an examination is quite broad, as it is not limited by the restrictions of Rule 16 of the Federal
Rules of Civil Procedure, and may thus be used for, among other purposes, discovering assets
and unearthing frauds. In re Duratech Indus., Inc., 241 B.R. 283, 289 (E.D.N.Y. 1999) (quoting
In re GHR Energy Corp., 33 B.R. 451, 454 (Bankr. D. Mass. 1983)); accord In re Table Talk,
Inc., 51 B.R. 143, 145 (Bankr. D. Mass. 1985). Courts have long analogized the depth and
breadth of such an examination to a fishing expedition. In re North Plaza, LLC, 395 B.R. 113,
122 (S.D. Cal. 2008); In re French, 145 B.R. 991, 992 (Bankr. D.S.D. 1992).
11.
The Chapter 11 Trustee believes that the Affiliates and Related Individuals have
documents and other information relevant to the Debtors assets and liabilities, operation of its
business pre-petition, and potential claims that may be available to the Debtors creditors. In
particular, the Chapter 11 Trustee believes that Affiliates and the Debtor may have been operated
as a single enterprise. The Chapter 11 Trustee further believes that misdirection, misapplication,
and/or mismanagement of funds may have occurred between the Debtor and certain (if not all) of
these Affiliates and/or Related Individuals. As a result, the proposed examinations and
document requests are necessary to evaluate the true extent of the Debtors assets.
Notice
12.
Notice of this Motion has been given to (i) the Office of the United States Trustee
for the District of Massachusetts; (ii) counsel for the Debtor; (iii) counsel to First Financial Bank,
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N.A.; (iv) the Affiliates; (v) the Related Individuals; and (vi) any other parties requesting notice.
The Chapter 11 Trustee submits that, given the nature of the relief requested, no other or further
notice of the relief requested is necessary.
No Prior Request
13.
Court.
No previous request for the relief sought herein has been made to this or any other
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WHEREFORE, the Chapter 11 Trustee respectfully requests that this Court enter an Order:
(a) authorizing the Chapter 11 Trustee to conduct examinations
of the Affiliates and Related Individuals pursuant to Federal
Rule of Bankruptcy Procedure 2004;
(b) directing the Affiliates and Related Individuals to produce
those documents which are responsive to the subpoenas to be
served by the Trustee following allowance of this Motion, and
to attend oral examinations to be conducted by the Chapter 11
Trustee upon five (5) business days notice; and
(c) granting to the Chapter 11 Trustee such other and further
relief as this Court deems just and proper under the
circumstances.