Trustee challenges removal in Southern bankruptcy

Lee Freeman, the Trustee for Southern Montana Electric Generation and Transmission Cooperative, Inc. (Southern) filed a response to the Motion to Remove Trustee filed by Fergus Electric Cooperative, Inc. (Fergus), one of the four remaining co-ops. He objects to his removal as trustee. Fergus has now been joined in the argument by Mid-Yellowstone Electric Co-op and Beartooth Electric Cooperative, Inc. (BEC) as well as several unsecured creditors. The trustee argued against terminating his position and returning management of Southern to the remaining co-ops. Highlights of the trustee’s numerous arguments are summarized below: 1. No change in circumstance would warrant meeting the legal standards for change of trustee; 2. Fergus’ position that the co-ops are no longer “hopelessly deadlocked” is a change warranting termination is not true; 3. By filing its motion and plan to liquidate assets Fergus is not looking out for the best interests of the creditors and the estate; 4. The strong presumption that should be given to the debtor to control its own bankruptcy no longer exists once a trustee is appointed; 5. The debtor in possession is a fiduciary and is therefore refrained from acting in a manner that would endanger the estate or hinder its successful reorganization. In proposing a plan to liquidate Fergus goes against this proposition; 6. Since the debtor members are also creditors, they ignore any co-op concerns; 7. The cases cited by Fergus do not support its argument; 8. Liquidation cannot occur because it would cause loss of jobs and misuse of economic resources; 9. The fact that a co-op disagrees doesn’t rise to cause to remove trustee; 10. The plan threatens to bring down the reorganization efforts; and 11. The trustee’s removal and the plan is not in the best interest of creditors or the estate. The estate in this case, is everything-including, according to Boyd, the members who are obligated to pay whatever rates ultimately are disclosed as proposed in trustee’s plan.

Upcoming Events

  • Monday, November 20, 2017 - 7:00pm
    Joliet Group meets at the Community Center Monday at 7 p.m.
  • Tuesday, November 21, 2017 - 7:00pm
    Now Group meets at the Bridger United Methodist Church, 222 W. Broadway (west entrance of church) Tuesday at 7 p.m.
  • Wednesday, November 22, 2017 - 8:00am
    Rock Creek Group meets Tuesdays and Saturdays at 8 a.m. and Wednesdays and Fridays at 7 p.m. at Calvary Church, 9 N Villard, Red Lodge.
  • Wednesday, November 22, 2017 - 9:30am
    Open 2nd and 4th Wednesday 9:30 a.m. – 11:30 a.m. and from 7 p.m. – 8 p.m. 206 N ‘D’ Street. More info 662-1060.
  • Wednesday, November 22, 2017 - 7:00pm
    Rock Creek Group meets Tuesdays and Saturdays at 8 a.m. and Wednesdays and Fridays at 7 p.m. at Calvary Church, 9 N Villard, Red Lodge.
  • Thursday, November 23, 2017 (All day)
    The Red Lodge Carnegie Library will be closed on Thursday, Nov. 23, in observance of Thanksgiving Day.  The library will be open on Friday, Nov. 24 and Saturday, Nov. 25.