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DIAMONDBACK INDUSTRIES: Largest Creditor Has Issues With Plan

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Repeat Precision, LLC, the largest creditor of debtor Diamondback Industries, Inc., objects to the First Amended Disclosure Statement to Joint Chapter 11 Plan of Reorganization filed by Diamondback and its Affiliated Debtors.

Repeat Precision claims that the proposed plan purports to temporarily enjoin Repeat Precision from prosecuting its personal claims under TUFTA against the Drurys, UMB Bank and any other potential defendants. It says the question is whether an injunction protecting the orchestrator and recipients of substantial alleged fraudulent transfers can ever be issued in a plan.

Repeat Precision states that a non-consensual third-party release or permanent injunction prohibiting Repeat Precision from prosecuting its claims is inappropriate and cannot be ordered.

Repeat Precision points out that the Plan defines and references “Exit Financing Documents” as new loan documents that will be executed by the Debtor and the Bank. The Debtor should be required to disclose all material terms of any new loan documents with the Bank, and provide a copy of all such documents, as very frequently the “devil is in the details.”

Repeat Precision asserts that there is no discussion of the Jackson Brewing factors yet, as an insider settlement subject to greater scrutiny, all the more discussion and detail is needed.

Repeat Precision further asserts that the Debtor should discuss why it has determined to settle at least $22 million in obvious fraudulent transfers, and upwards of perhaps $40 million in transfers (some of which may not be avoidable), for only $12 million—only $9.5 million of which is paid up front.

A full-text copy of Repeat Precision’s objection dated August 6, 2020, is available at https://tinyurl.com/y239rlqo from PacerMonitor.com at no charge.

Attorneys for Repeat Precision:

Davor Rukavina, Esq.
Thomas D. Berghman, Esq.
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard Street, Suite 3800
Dallas, Texas 75201-6659
Telephone: (214) 855-7500
Facsimile: (214) 855-7584

About Diamondback Industries

Diamondback Industries is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. For more information, visit https://diamondbackindustries.com/

On April 21, 2020, Diamondback Industries and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504). The petitions were signed by Benton Cantey, president. Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities.

The Debtors tapped Foley & Lardner LLP as their bankruptcy counsel, Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone LLP as special counsel, and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/

The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on June 23, 2020.