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PAUL, WEISS, RIFKIND, W H A R T O N & GARRISON
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LLOYD K G A R R I S O N
R A N D O L P H E PAUL
SIMON H RIFKIND
LOUIS S WEISS
JOHN F WHARTON
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September 30, 2015
Main Document
MATTHEW W ABBOTT
EDWARD T ACKERMAN
A L L A N J ARFFA
ROBERT A A T K I N S
DAVID J B A L L
JOHN F BAUGHMAN
LYNN B BAYARD
DANIEL J SELLER
CRAIG A B E N S O N
M I T C H E L L L BERG
MARK S B E R G M A N
BRUCE BIRENBOIM
H CHRISTOPHER BOEHNiNG
ANGELO BONVINO
JAMES L BROCHIN
RICHARD J BRONSTEIN
DAVID W B R O W N
SUSANNA M BUERGEL
PATRICK S C A M P B E L L *
J E S S I C A S CAREY
JEANETTE K CHAN
YVONNE Y F CHAN
LEWIS R CLAYTON
JAY C O H E N
KELLEY A CORNISH
CHRISTOPHER J CUMMINGS
C H A R L E S E DAVIDOW
T H O M A S V DE L A B A S T I D E III
ARIEL J DECKELBAUM
A L I C E B E L I S L E EATON
ANDREW J EHRLICH
GREGORY A EZRING
L E S L I E GORDON FAGEN
MARC F A L C O N E
ROSS A F I E L D S T O N
ANDREW C FINCH
BRAD J F I N K E L S T E 1 N
BRIAN P FINNEGAN
ROBERTO F I N Z I
PETER E FISCH
ROBERT C F L E D E R
MARTIN FLUMENBAUM
A N D R E W J FOLEY
HARRIS B F R E I D U S
M A N U E L S FREY
ANDREW L GAINES
KENNETH A GALLO
MICHAEL E GERTZMAN
A D A M M GIVERTZ
SALVATORE G O G L I O R M E L L A
ROBERT D G O L D B A U M
NEIL GOLDMAN
CATHERINE L GOODALL
ER1CGOODISON
C H A R L E S H GOOGE, J R
A N D R E W G GORDON
UDI G R O F M A N
NICHOLAS GROOMBRIDGE
BRUCE A G U T E N P L A N
G A I N E S GWATHMEY, 111
ALAN S HALPERIN
JUSTIN G HAMILL
CLAUDIA HAMMERMAN
GERARD E HARPER
BRIAN S HERMANN
MICHELE HIRSHMAN
M I C H A E L S HONG
DAVID S H U N T I N G T O N
AMRAN HUSSEIN
LORETTA A IPPOL1TO
BRIAN M JANSON
JAREN JANGHORBANI
MEREDITH J KANE
ROBERTA A K A P L A N
B R A D S KARP
PATRICK N K A R S N I T Z
JOHN C KENNEDY
BRIAN KIM
A L A N W KORNBERG
DANIEL J KRAMER
DAVID K L A K H D H I R
STEPHEN P LAMB*
JOHN E LANGE
DANIEL J LEFFELL
XIAOYU GREG L I U
JEFFREY D M A R E L L
MARCO V MASOTTI
E D W I N S MAYNARD
DAVID W MAYO
E L I Z A B E T H R MCCOLM
MARK F M E N D E L S O H N
WILLIAM B MICHAEL
TOBY S MYERSON
C A T H E R I N E NYARADY
JANE B O'BRIEN
A L E X YOUNG K OH
BRAD R OKUN
K E L L E Y D PARKER
MARC E P E R L M U T T E R
VALERIE E RADWANER
C A R L L REISNER
L O R I N L REISNER
WALTER G RICCIARDI
WALTER R I E M A N
RICHARD A ROSEN
ANDREW N ROSENBERG
JACQUELINE P RUBIN
R A P H A E L M RUSSO
ELIZABETH M SACKSTEDER
J E F F R E Y D SAFERSTEIN
JEFFREY B SAMUELS
D A L E M SARRO
TERRY E S C H I M E K
KENNETH M SCHNEIDER
ROBERT B S C H U M E R
J O H N M SCOTT
STEPHEN J SHIMSHAK
DAVID R S I C U L A R
MOSES S I L V E R M A N
STEVEN S I M K I N
JOSEPH J SIMONS
A U D R A J SOLOWAY
SCOTT M SONTAG
T A R U N M STEWART
ERIC A L A N STONE
A I D A N SYNNOTT
ROBYN F T A R N O F S K Y
MONICA K T H U R M O N D
DANIEL J TOAL
LIZA M V E L A Z Q U E Z
MARIA T V U L L O
ALEXANDRA M W A L S H *
LAWRENCE G WEE
THEODORE V W E L L S , J R
BETH A W I L K I N S O N
STEVEN J W I L L I A M S
L A W R E N C E I WITDORCH1C
MARK B W L A Z L O
J U L I A MASON W O O D
JENNIFER H WU
J O R D A N E YARETT
KAYE N YOSHINO
TONG YU
TRACEY A Z A C C O N E
T A U R I E M ZEITZER
T ROBERT Z O C H O W S K I , J R
*NOT ADMITTED TO THE NEW YORK BAR
VIA E-MAIL AND ECF
Honorable Shelley C. Chapman
United States Bankruptcy Court
Southern District of New York
1 Bowling Green
New York, New York 10004
Re:
Sabine Oil & Gas Corp. v. Wilmington Trust, N.A., Adv. Pro. No. 15-01126 (SCC)
Dear Judge Chapman:
Wilmington Trust, N.A., as successor administrative agent under the Second Lien Credit
Agreement (the "Second Lien Agent"), respectfully requests that the Court maintain the parties'
agreed-upon schedule in the above-referenced adversary proceeding and decide the pending
Motion to Dismiss. Because the Second Lien Agent sees no merit in going forward on a
"without prejudice" basis, if the Court concludes that the case should not proceed pursuant to the
parties' previously agreed schedule, then the Second Lien Agent respectfully requests that the
Committee prioritize its investigation of the Second Lien Agent and Second Lien Lenders and
conclude such investigation no later than the November 10th Challenge Deadline, so that the
Second Lien Agent's Motion to Dismiss can be heard as soon thereafter as practicable.
The Second Lien Agent agrees with the Debtors that the pending Motion to Dismiss
presents two discrete legal issues, the resolution of which will help facilitate restructuring
discussions among the parties. It also agrees that the Debtors have spent substantial resources
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PAUL, WEISS, RIFKIND, W H A R T O N & GARRISON LLP
Honorable Shelley C. Chapman
United States Bankruptcy Court
Southern District of New York
2
formulating the present claims (including an investigation by the Independent Directors
Committee that has been ongoing since at least May 2015) and the parties spent substantial time
and money briefing the legal issues. Accordingly, a decision on the merits of the Second Lien
Agent's Motion will greatly aid all parties in progressing these chapter 11 cases. Without a
decision, it is difficult to see how these cases can move forward.
The Second Lien Agent disagrees with the Debtors' vague proposal to adjudicate the
Motion to Dismiss on a "without prejudice" basis.1 Following the Debtors' investigation, Sabine
Oil & Gas Corporation filed the claims it believed appropriate, the Second Lien Agent timely
filed the Motion to Dismiss for failure to state a claim, and the parties agreed on a briefing
schedule. Should the Court dismiss the Complaint, the Second Lien Agent is entitled to the full
relief contemplated under Rule 12(b)(6) of the Federal Rules of Civil Procedures and Bankruptcy
Rule 7012. As the Committee notes, the Debtors' proposal is backwards: the Court should first
rule on the merits, and then the parties can resolve or, if necessary, litigate what effect, if any, the
Court's ruling has on other claims. But the Committee's concerns do not require staying the
litigation indefinitely or further briefing on scheduling; rather, if the Committee seeks to be
heard on the Motion to Dismiss, it should participate at the oral argument on the Motion. The
adversary proceeding did not take the Committee by surprise. It was filed on July 15th, the
Motion to Dismiss was filed August 17th, and the parties' agreed upon schedule was filed August
24th. The Committee has had ample time to protect its potential interests in the litigation.
Should the Court determine not to proceed with the Motion as scheduled, the Second
Lien Agent requests that the motion be adjourned for only a brief period to enable the Committee
to prioritize and complete its investigations of the Second Lien Agent and Second Lien Lenders
as promptly as possible, and in any event no later than the November 10, 2015 Challenge
Deadline. Once the investigation is complete, argument on the Second Lien Agent's Motion to
Dismiss should proceed at the next available hearing date, so that the Court can rule on these
threshold issues, and the parties can focus on reorganizing the Debtors rather than just litigating.
Respectfully yours,
i
The Second Lien Agent also strongly disagrees with the Debtors' description of the facts underlying the
adversary proceeding. As will be shown in the Second Lien Agent's reply brief, Sabine Oil & Gas Corporation
(not "Forest Oil") granted liens to defendant on its own assets (not "Forest Oil's") to secure its own obligations
(not "Sabine O&G's," i.e., legacy Sabine) under the Second Lien Credit Agreement. While this issue is for
another day, these facts are undeniable and easily ascertained by a cursory review of the relevant transaction
documents before the Court on the Motion to Dismiss.
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PAUL, WEISS, RIFKIND, W H A R T O N & GARRISON LLP
Honorable Shelley C. Chapman
United States Bankruptcy Court
Southern District of New York
cc: D. Ross Martin
Mark R. Somerstein
Keith H. Wofford
Margot B. Schonholtz
Paul K. Schwartzberg
Gabor Balassa
Jonathan S. Henes
Christopher J. Marcus
Ryan Blaine Bennet
A. Katrine Jakola
Moses Silverman
Brian S. Hermann
Main Document