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Case 11-13028

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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF LOUISIANA In re: VIRGIN OFFSHORE USA, Inc. Debtor ) ) ) ) ) ) ) CASE NO. 11-13028

SECTION A

CHAPTER 11

LIMITED OBJECTION OF VIRGIN OFFSHORE INVESTORS TO DEBTORS CHAPTER 11 PLAN OF REORGANIZATION [Docket #402] NOW INTO COURT, through undersigned counsel, come certain non-insider investor parties (Investors)1, through their undersigned counsel, and file this Limited Objection (Objection) to the Chapter 11 Plan of Reorganization (Plan) [Docket #402] filed by Virgin Offshore, USA, Inc. (Offshore or the Debtor) on March 28, 2013, stating as follows: 1. The Investors file this Limited Objection out of an abundance of caution and largely to state the Investors understanding as to the impact and meaning of certain Plan provisions, in case such

The so-called Investors are using this terminology only because it has been widely used in this case (and in the Plan), and these parties reserve all rights in connection with their claims, which are set forth in proofs of claim filed in the case. The Investors filing this Objection are: B.A. Adams Oil and Gas Investments, LLC; ADM Properties, Inc.; Anelda Investments, LLC; Estate of Bryan Bell; Cahaba Partnership, Ltd.; John S. Chalsty; The Chalsty Family, L.L.C., II; Carlton Capital Group, LLC; Delta Royalty Company, Inc.; William C. Eacho; Lagniappe Productions of Louisiana, LLC; Georgie W. McMullan; Estate of Paul W. McMullen; Frank D. Montague, Jr.; W. D. Mounger; Prince Henry Navigator I, LLC; Prince Henry Navigator II, LLC; Silver Sands High Island 198, LLC; Silver Sands Offshore, LLC; Silver Sands Ship Shoal, LLC; Silver Sands WC 78, LLC; Charles L. Wilmer; Rivers L.P.; Rivers Number V, L.L.C.; and Rivers Number VI, L.L.C. The undersigned counsel has filed a Rule 2019 Statement [Docket # 338] identifying this group. 1
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meaning is disputed or is impacted by confirmation proceedings or any positions of the parties. The Investors expect that that Trustee will agree with the limited statements set forth herein. 2. (a) Reservation of Investor Claims for Later Determination. The Investors have all

filed proofs of claim. Although the Plan states that investor claims are disputed (Plan, p. 5), the Plan contains a typical claims objection mechanism (Plan, pp. 19-20). The Investors understand that a contested matter or adversary proceeding will be commenced after the confirmation date to determine the scope and allowance of the Investors claims. (The Investors are actively discussing the claims with the Trustee in the hope that they can be consensually resolved.) 3. (b) Investor Contracts as Executory Contracts. The Plan indicates that the Debtor is

rejecting certain investor contracts in the Producing Wells, and the Investors will file their rejection damages claims as appropriate. (Plan, p. 28) The Trustee apparently considers other Investor contracts to be non-executory (as they are not mentioned in the Plan). The Investors reserve all rights under their contractual documents with the Debtor including all claims asserted in proofs of claim, and Investors generally assert that monetary claims may be owed to the Investors under such contracts, particularly in connection with Vermillion 179, regardless of whether such contracts are deemed executory or non-executory, or rejected or assumed. The amount of such claims shall be determined in the claim objection process (discussed above), and the Investors will endeavor to fix such amounts through negotiation and agreement. 4. (c) Reservation for Later Determination of Issues Under Bankruptcy Code 541 /

544. The Plan contemplates that an adversary proceeding will be commenced, if necessary, concerning claims to ownership, if any, which may be asserted by Investors in the Producing 2
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Wells. (Plan, p. 28)

The Investors understand that such provision will reserve for later

determination any disputes (if any) concerning any continuing effectiveness of any contractual or other claims of ownership for the Debtors oil and gas properties, under, among other law, Bankruptcy Code 541 and 544. 5. The Investors object, in the event that any of the foregoing statements regarding the meaning and impact of Plan provisions are disputed or altered in the Plan confirmation process. WHEREFORE, the Investors respectfully submit that Plan confirmation should encompass the limited statements set forth herein. DATED: June 12, 2013 Respectfully Submitted,

_/s/ C. Davin Boldissar_____________ Omer F. Kuebel III (LA #21682) C. Davin Boldissar (LA #29094) Locke Lord LLP 601 Poydras Street, Suite 2660 New Orleans, Louisiana 70130-6036 Telephone: (504) 558-5100 Fax: (504) 558-5200 dboldissar@lockelord.com Attorneys for Certain Investors

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