A group of MTE Holdings creditors want its Chief Executive Officer — real estate developer Mark Siffin — replaced by a court-appointed official amid accusations of fraud and mismanagement at the bankrupt oil driller, Bloomberg News reported. Three stakeholders in the chapter 11 case — Natixis SA, Riverstone Credit Management LLC and a group of drilling service providers — have asked Bankruptcy Judge Christopher Sontchi to appoint a trustee to replace Siffin during bankruptcy. Lawyers for Natixis criticized MTE’s operating subsidiary, MDC Energy LLC, in court papers for “a near complete lack of transparency” and “gross mismanagement,” while Riverstone alleged MTE leadership has “exhibited fraud, dishonesty, and incompetence.” The U.S. Trustee is also requesting a trustee in the MTE case, saying that “management have shown that they cannot be trusted” to carry out the fiduciary duties required in chapter 11. The groups have voiced concern about millions of dollars in cash allegedly transferred out of MDC in the months before its bankruptcy, including $8.5 million in consulting fees to Siffin, according to Riverstone’s court documents.
