Case Update: KTBS Wins Total Defense Victory in $7.2 Billion Fraudulent Transfer Action
On June 14, 2023, United States Bankruptcy Judge Shannon issued an opinion in favor of the defendants in a fraudulent transfer action arising out of the Delaware bankruptcy case of oil and gas company Samson Resources Corporation. The trustee of the post-bankruptcy Samson Settlement Trust sought to recover approximately $7.2 billion in alleged fraudulent transfers from the defendants, former shareholders and related entities, in connection with their sale of Samson approximately four years prior to its bankruptcy filing. The defendants are represented by KTBS Law LLP, Morgan Lewis & Bockius LLP, and Young Conaway Stargatt & Taylor, LLP in the fraudulent transfer action. Following a three-week trial in which KTBS attorneys David Stern and Samuel Kidder played key roles, Judge Shannon rejected all of plaintiff’s claims. The court concluded: “Risk is an inescapable feature of commercial transactions. Here, the [former shareholders] placed a healthy, thriving business up for sale; the buyers presumably concluded that they got a good deal and could grow the business to new heights of profitability. Their failure to accomplish their goals does not mean that the [former shareholders] must now pay back the sale proceeds they received. Put bluntly, the [former shareholders] are neither the guarantor nor the insurer of the future success of the business they sold.” Accordingly, Judge Shannon awarded the trustee nothing and ruled in favor of the defendants on all counts.