San Antonio-based Primera Energy has filed for chapter 11 protection amid a lawsuit filed by unhappy investors in state district court, the San Antonio Business Journal reported yesterday. Court filings show that the oil exploration and production company owes $1 million to $10 million to 1,000 to 5,000 creditors. The bankruptcy filing came one day after Primera's CEO Brian Alfaro lost a legal battle in Bexar County's 288th State District Court, where at least 20 people filed a lawsuit alleging fraud and deceptive trade practices. Judge Antonia Arteaga issued an order last Wednesday putting Primera Energy into a receivership, in which a neutral third-party lawyer would oversee the company and its activities. Investors claimed in the lawsuit that Alfaro fraudulently raised $40 million for unprofitable oil well projects in McMullen and Gonzales counties and that Alfaro maintained a "lavish lifestyle" by skimming 10 percent of their money for himself. The investors allege in the filing that Alfaro put 60 percent of their money in his general accounts for Primera Energy, Alfaro Oil & Gas and Alfaro Energy while the remaining 30 percent actually went to the well projects.
