Court Battle Heats Up in Hunt Case

A jurisdictional fight heated up Tuesday over whether the huge Hunt bankruptcy case should be heard in New Orleans or Dallas.

Bankruptcy petitions for Placid Oil and two other Hunt entities were filed Friday in New Orleans, an action that might have violated a previous order by the Dallas judge hearing the Hunts’ $15-billion in lawsuits against 23 banks.

U.S. District Judge Barefoot Sanders is to hold a hearing today on whether to hold the Hunt interests in contempt and order the case moved to Dallas. The judge previously ordered the Hunts to appear in court and explain why they had filed their bankruptcy petition in Louisiana rather than Texas.

On Tuesday, the Hunt attorneys asked Sanders to drop that order and instead begin contempt proceedings against the banks that lobbied against the New Orleans jurisdiction. The Hunts also asked that today’s hearing be postponed. The judge didn’t respond to the motions.

In a statement, the Hunts said a Chapter 11 bankruptcy petition may be filed “anywhere the bankruptcy law provides that such cases be filed and where the debtors believe their properties will be best protected.” Most of Placid’s assets, employees and suppliers are in Louisiana, the Hunts said.

The Hunts, sons of the late billionaire H. L. Hunt, have been in financial trouble as a result of the collapse of world oil prices this year, and they filed for bankruptcy protection for their Placid Oil unit to prevent creditors from seizing its assets.

Meanwhile, the Hunts got through Tuesday’s monthly Dallas County foreclosure auction unscathed. The weekend filing of a separate bankruptcy petition on behalf of a family trust effectively protected a Hunt-owned 286-acre real estate tract from the auction block.

The bankruptcy petitions shielded several other major Hunt assets from the auction block in Texas and Mississippi. The assets were collateral for about $773 million in loans on which the Hunts have defaulted.