Bankrupt Gulfco Claims Creditor Had 'Scheme To Steal' Unit

Law360, Wilmington (February 3, 2014, 9:53 PM EST) -- Bankrupt oil drilling equipment holding company Gulfco Holding Corp. lodged an adversary action in its case late Friday claiming its Chapter 11 filing stems from secured creditor Prospect Capital Corp.’s “scheme to steal” its nondebtor operating affiliate Gulf Coast Machine & Supply Co.

In a complaint filed in the Delaware bankruptcy court, Gulfco said it had borrowed about $42 million from Prospect in order to buy Texas-based Gulf Coast for $72 million at a blind auction in 2012.

But unbeknownst to the debtor, Prospect also had...
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