Shareholders of Breitburn Energy Partners LP launched a last-ditch legal effort on Thursday to prevent the bankrupt oil producer from wiping out their investment and sticking them with a huge tax bill at a time of surging crude prices, Reuters reported. At a hearing in U.S. Bankruptcy Court in New York, equity committee lawyer Vincent Indelicato said that Breitburn’s reorganization plan was based on an “indefensibly low” valuation. He also called it a “scheme” to give away assets to select creditors and reward management while hurting shareholders. The stakes are especially high for Breitburn’s shareholders because it is structured as a “master limited partnership,” which provides tax advantages when the company is profitable. But investors in such companies can lose more than 100 percent of their investment if the company does not make a profit. Breitburn lawyer Ray Schrock urged U.S. Bankruptcy Court Judge Stuart Bernstein to approve the reorganization plan and bring the complex, 18-month bankruptcy to a close.
