Bankrupt Oil Co. Wrongly Split Assets, 9th Circ. Told

Law360, Los Angeles (February 12, 2014, 7:26 PM ET) -- Shareholders of the bankrupt South Coast Oil Co. urged the Ninth Circuit on Wednesday to reverse a bankruptcy trustee’s settlement of litigation over the company’s assets, saying a bankruptcy judge improperly approved a deal that decreased the company’s value by $10 million.

During oral arguments in Pasadena, Calif., Douglas L. Mahaffey of Mahaffey & Associates, representing Palladino, told a three-judge panel that the bankruptcy judge never had the authority to approve bankruptcy trustee James J. Joseph’s use of South Coast’s voting shares in subsidiary Angus Petroleum...
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