In re WBH Energy

In re WBH Energy, United States Bankruptcy Court for the Western District of Texas, May 20, 2016, 2016 Bankr. LEXIS 2082

Attorneys’ fees under a JOA may only be awarded to the “prevailing party” if such party obtains a monetary judgment.

WBH Energy, LP (Debtor LP), WBH Energy Partners LLC (Debtor LLC) and WBH Energy GP, LLC (Debtor GP), filed a voluntary Chapter 11 petition. Debtor LP was the operator under a JOA, Debtor LLC was a working interest owner as was USED. Due to unpaid vendors, USED filed suit in state court and received a TRO removing Debtor LP and giving operatorship to USED. Bankruptcy was filed and the state court proceeding was dismissed and the matter moved to the Bankruptcy Court. USED was confirmed as Operator under the JOA but did not receive any recovery of monetary damages. USED argued that it was entitled to attorneys’ fees under the JOA, which provided that attorneys’ fees were to be awarded to the prevailing party in any action instituted to enforce a financial obligation of a party. The court determined that, since USED did not recover an award of monetary damages, it was not entitled to attorneys’ fees.