Kevin D. McCullough 

State Bar No. 00788005

Shannon S. Thomas

State Bar No. 24088442

ROCHELLE MCCULLOUGH, LLP

901 Main Street, Suite 3200

Dallas, Texas 75202

Telephone: (214) 953-0182

Facsimile: (888) 467-5979

kdm@romclaw.com

sthomas@romclaw.com

COUNSEL FOR LAURIE DAHL REA,

CHAPTER 7 TRUSTEE

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

In re: §

§

FDF ENERGY SERVICES LLC, § CASE NO. 24-40967-mxm7

§

Debtor. §

§

EMERGENCY MOTION TO DISMISS CASE

TO THE HONORABLE MARK X. MULLIN,

UNITED STATES BANKRUPTCY JUDGE:

Laurie Dahl Rea, Chapter 7 Trustee in the above-captioned bankruptcy case (the 

“Trustee”) files this Emergency Motion to Dismiss Case (the “Motion”) seeking an order 

dismissing this case pursuant to 11 U.S.C §§ 105, 704, and 707(a) on the following grounds:

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this Motion under 28 U.S.C. 

§§ 157 and 1334. Consideration of this Motion is a core proceeding under 28 U.S.C. § 

157(b)(2). Venue of this proceeding is proper in this district pursuant to 28 U.S.C. §§ 1408 and 

1409.

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II. BACKGROUND AND RELIEF REQUESTED

2. On March 22, 2024, FDF Energy Services, LLC (the “Debtor”) commenced this

chapter 7 case in the United States Bankruptcy Court for the Northern District of Texas, Fort 

Worth Division. Laurie Dahl Rea was appointed as the Chapter 7 Trustee. 

3. Prior to filing bankruptcy, the Debtor operated in the oil and gas services industry, 

providing cleaning services such as drilling rig mud system cleaning, storage tank cleaning and 

hydro-excavating, amongst others, to oil and gas operators along the gulf coast. The Debtor also 

provided diesel and synthetic based muds to be used in exploration and production operations. In 

total, the Debtor ran five (5) separate facilities across Texas and Louisiana, located in Victoria 

and Odessa, Texas, and Logansport, Crowley and Port Fourchon (Donner), Louisiana, 

respectively. It is the Trustee’s understanding that all but one of the locations was owned by the 

Debtor. The Port Fourchon, Louisiana site was leased. 

4. Substantially all of the Debtor’s assets are subject to a blanket lien in favor of 

PNC Bank, National Association as administrative agent (in such capacity the “Agent”) for the 

Lenders.

1

 The only assets not encumbered by the Lender and Agent’s secured interest are a few 

titled trailers and trucks of minimal value, commercial tort claims, chapter 5 causes of action, 

and potential claims against the Debtor’s directors and officers insurance policy.

5. On April 8, 2024, pursuant to agreement by the Trustee, Agent, and Lenders, the 

Court entered the Stipulation and Agreed Order by and Among the Chapter 7 Trustee and 

Secured Lenders Regarding Emergency Use of Cash Collateral [Dkt. No. 24] (the “First 

Stipulation”), whereby the Court authorized the use of the Lenders’ cash collateral for limited 

1

(i) PNC Bank, National Association; (ii) Steel City Capital Funding; (iii) Cerberus ASRS Funding, LLC; (iv) 

Cerberus AUS Levered Holdings III, LLC; (v) Cerberus AUS Levered Holdings, L.P.; (vi) Cerberus ICQ Levered 

Loan Opportunities Fund, L.P.; (vii) Cerberus KRS Levered Loan Opportunities Fund, L.P.; (viii) Cerberus 

Levered Loan Opportunities Fund II, L.P.; (ix) Cerberus N-1 Funding LLC; (x) Cerberus Offshore Levered Loan 

Opportunities Master Fund II, L.P.; and (xi) Cerberus SWC Levered Holdings, L.P. shall be referred to, 

collectively herein, as the “Lenders.”

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purposes, including cleaning up certain environmental issues at the Debtor’s facilities in 

Logansport and Port Fourchon Louisiana.

2

6. Since entry of the First Stipulation, the Trustee and her professionals have worked 

diligently to understand the full extent of the Debtor’s assets, any further potential environmental 

liabilities, and what will be required to efficiently and effectively administer the bankruptcy 

estate. This endeavor has included site visits to each of the Debtor’s five locations throughout 

Texas and Louisiana, as well as extensive discussion with former employees. 

7. In performing the above investigation, the estate incurred various reasonable and 

necessary administrative expenses and professional fees that benefited the Agent and Lenders by 

preserving the value of their collateral. 

8. Unfortunately, the Trustee, the Agent, and the Lenders have been unable to reach 

an agreement on a comprehensive funding agreement, which would be necessary for the Trustee 

to (i) purchase general liability insurance, (ii) address ongoing environmental issues, (iii) pay for 

utilities necessary to ensure continued utility services at the Debtor’s various locations, (iv)

preserve the electronic data of the Debtor including access to Debtor’s historical IT and 

accounting system, (v) perform routine maintenance and security at the Debtor’s Logansport, 

Louisiana facility necessary to preserve the value of equipment and inventory, and (vi) pay for 

assistance from former employees necessary to accomplish the forgoing.

9. Although the Trustee has identified a few potential assets that might have value 

for the benefit unsecured creditors, without funding to preserve the books and records or to 

pursue the litigation necessary to liquidate those assets, the Trustee cannot pursue administration 

of those assets. Moreover, there is a high likelihood that any funds recovered from the 

2 When operating, the Debtor dealt with hazardous materials and waste at its various locations – in some instances, 

hazardous material remains onsite. Unfortunately, there is no security at the various locations and currently no 

property or general liability insurance on the properties. 

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unencumbered assets would be subject to claims of various government environmental 

regulatory agencies including the Texas Commission on Environmental Quality (“TCEQ”) and 

the Louisiana Department of Environmental Quality (“LDEQ”). While the Trustee used funds 

from the First Stipulation to remedy certain immediate environmental concerns, hazardous 

materials and waste remain at most of the Debtor’s facilities.

10. Accordingly, the Trustee cannot comply with her duties under section 704 of the 

Bankruptcy Code.

11. Further, the Trustee seemingly has no ability to abandon the burdensome assets of 

this estate under the Supreme Court’s decision in Midlantic Nat. Bank v. New Jersey Dept. of 

Environmental Protection, 474 U.S. 494 (1986). The TCEQ, LDEQ, and the United States 

trustee have indicated they would oppose abandonment of the Lender’s collateral. The TCEQ 

has also indicated that it will oppose the Lenders’ request for stay relief.

12. Since the Petition Date, the estate has incurred the following reasonable and 

necessary professional fees and administrative expenses to investigate and preserve the value of 

the assets:

a. $42,199.25 for the work performed post-petition by former employees;

b. $14,520.00 for Harney Partners3for its work in the chapter 7 cases;

c. $3,000.00 still owed to Total Energy Services for Logansport environmental 

clean-up authorized by the First Stipulation;

d. $100,000.00 to Rochelle McCullough as partial compensation and 

reimbursement of expenses;

e. $19,100.00 as chapter 7 trustee commission (this is an rough approximation of 

the Trustee’s commission under § 326 for all disbursements made to date and 

outlined above). A copy of the Trustee’s Form 2 reflecting disbursements 

made to date is attached as Exhibit A.

13. These administrative expenses and professional fees, including the Trustee’s 

commission on amounts disbursed, total $178,909.25.

3 On or about May 15, 2024 the Trustee filed a motion seeking employment of Harney Partners to act as her 

Financial Advisor in this case [Dkt. No. 40].

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14. The Trustee is currently holding $13,984.11 in her trustee account. These funds 

are subject to the Lenders’ and Agent’s blanket lien on assets.

15. The Lenders would need to transfer an additional $164,925.14 to pay for the 

outstanding administrative expenses and professional fees. If the Lenders do not agree to make 

this payment, the Trustee requests that the Court order them to pay it, to the extent possible, as 

the fees and expenses were incurred to preserve the Lenders’ collateral.

16. The Trustee requests authority to pay the administrative expenses and 

professional fees without further application to the Court for approval of such fees and expenses.

17. Although the UST would oppose abandonment, the UST has indicated that it will 

not oppose dismissal of this case. As of the filing of this Motion, the LDEQ and TXEQ have not 

taken a position regarding dismissal.

18. As there are insufficient funds available to the Trustee to comply with her duties 

under section 704 of the Bankruptcy Code and the continuation of this case carries risk to the 

estate and to the public, the Trustee submits that it is in the best interest of all parties-in-interest

to have this case dismissed upon the payment of administrative expenses and professional fees as 

outlined above.

19. Contemporaneously herewith, the Trustee is filing a motion requesting the Court 

hear this motion on an expedited basis at the status conference that is currently set for Tuesday 

May 7, 2024 at 2:30 pm.

WHEREFORE, the Trustee respectfully request the Court enter an order (i) directing the 

Lenders to make the above requested payment for administrative expenses and professional fees, 

most of which have been incurred to preserve their collateral, (ii) authorizing the Trustee to pay 

the administrative expenses and professional fees without further application to or order from the 

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Court, (iii) dismissing this case and (iv) granting the Trustee all other just and proper relief.

Dated: May 3, 2024. 

/s/ Shannon S. Thomas

Kevin D. McCullough 

State Bar No. 00788005

Shannon S. Thomas

State Bar No. 24088442

ROCHELLE MCCULLOUGH, LLP

901 Main Street, Suite 3200

Dallas, Texas 75202

Telephone: (214) 953-0182

Facsimile: (888) 467-5979

kdm@romclaw.com

sthomas@romclaw.com

COUNSEL FOR LAURIE DAHL REA, 

CHAPTER 7 TRUSTEE

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CERTIFICATE OF SERVICE

The undersigned hereby certifies that a true and correct copy of the foregoing document 

was electronically filed and served upon all parties registered to receive ECF notification in this 

case, as well as on the below-listed parties via email on May 3, 2024. 

Regina Stango Kelbon 

B. Nelson Sproat 

BLANK ROME LLP

Email: regina.kelbon@blankrome.com

nelson.sproat@blankrome.com

Scott R. Cheatham (TBN) 24050406

Richard Aguilar 

ADAMS AND REESE LLP

Email: Scott.cheatham@arlaw.com

richard.aguilar@arlaw.com

Counsel for PNC Bank, National Association and 

Steel City Capital Funding

Adam C. Harris (pro hac vice forthcoming)

Email: adam.harris@srz.com

Counsel to Cerberus ASRS Funding, LLC, Cerberus AUS Levered Holdings III, LLC, Cerberus AUS Levered 

Holdings, L.P., Cerberus ICQ Levered Loan Opportunities Fund, L.P., Cerberus KRS Levered Loan Opportunities 

Fund, L.P., Cerberus Levered Loan Opportunities Fund II, L.P., Cerberus N-1 Funding LLC, Cerberus Offshore 

Levered Loan Opportunities Master Fund II, L.P., and Cerberus SWC Levered Holdings, L.P.

Lisa Lambert, U.S. Trustee’s Office

Email: lisa.l.lambert@usdoj.gov

Erin Schmidt, U.S. Trustee’s Office

Email: Erin.Schmidt2@usdoj.gov

Susan Hersh, U.S. Trustee’s Office

Email: Susan.Hersh@usdoj.gov

Daniel Cristina, LDEQ

Daniel.Cristina@la.gov

Mike Daniels, LDEQ

Mike.Daniela@la.gov

Roma Desai, Texas AG for the TCEQ

Roma.Desai@oag.texas.gov

Sean Flynn, Texas AG for the TCEQ

Sean.Flynn@oag.texas.gov

/s/ Shannon S. Thomas

Shannon S. Thomas

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