On October 26, 2016, just hours after SKV filed a complaint on behalf of the Black Elk Litigation Trustee against four related New York hedge funds, the United States Bankruptcy Court for the Southern District of Texas granted SKV’s Emergency Application for a Temporary Restraining Order and froze $117,000,000 in the hedge funds’ bank accounts.
The Original Complaint and Emergency Application filed by SKV partners Craig Smyser, Jeff Potts, and Justin Waggoner alleged that the Platinum Partners’ defendants engaged in an illegal arrangement to siphon off the proceeds of the sale of prime oil and gas assets by Black Elk Energy Offshore Operations, LLC to Renaissance Offshore in a transaction designed to defraud Black Elk and its creditors. The Court found that the pleadings and documents “reflect a scheme to illegally control the vote by the bondholders, resulting in an artificial and impermissible vote to authorize the transaction.” The Court found that Platinum’s activities were undertaken with the cooperation and participation of employees and officers of Black Elk.
