Threat to Sue

Hi Everyone, apologies to Saul if this is off the reservation, but I can’t think of a more knowledgable board to post this question. In addition, I assume this situation isn’t entirely unusual, so it might be interesting and informational for folks in the event you run into a similar encounter.

My mother received a ‘Notice of Litigation and Demand Letter’ from a law firm representing the ‘Trustee’ of the ‘Chapter 7 Estate’ of ATP Oil & Gas, an offshore drilling platform company that declared bankruptcy a couple of years ago after Deepwater Horizon (not involved, but were shut down like others pending the investigation).

The letter demands that my mother turn over a paltry sum of ATP stock dividend receipts she received over a short period just before Chapter 11 was filed. There were apparently 1.7 million shares issued, so a bunch of investors are presumably getting the same letter.

I’m not a lawyer (obviously, and don’t play one on television…), but I find it obnoxious that this creditor(?) is going after investors that have no culpability in the matter.

A quick search revealed that these letters are a common ‘shot across the bow’ correspondence, so I recognize that they’re hoping to intimidate people into sending them checks. The lawsuit is also real - looked it up: Rodney Tow v. T. Paul Bulmahn (former ATP CEO), so not a scam.

So the question is, how does one respond (if at all)? My mother retaining a lawyer will cost more than the demanded $199 (they’re actually willing to settle for $99), and likewise, procuring it from my mother will cost the Trustee more in legal fees than it’s worth. My mom could just send the $99 and be done with the harassment, but she finds the threatening letter so distasteful that she’s disinclined to do so.

Any guidance/insight is appreciated from those in the know…

  • Khleb

This sounds like a scam. The amount demanded and the amount for which they are willing to settle, $199 and $99, respectively, contribute to my thinking in that regard.

Is there anything in the “Notice of Litigation and Demand Letter” that spells out why the particular amount of $199 is being demanded?

Also, is there anything in that document concerning what they intend to do to the extent your mother declines to pay either the demand or settlement amount?

I am not aware of any legitimate basis for a trustee of a bankrupt estate to file suit against investors, unless the investors were also creditors of the bankrupt estate.

This just does not smell right.


I’m not posting from a position of experience on this matter.
However, I think the worst that could happen is the $199 is turned over to collections and your mother receives annoying phone calls. Depending on whether that matters to her, may help make your decision as to whether to settle for $99.

I have zero knowledge of the legality of the claim made against your mother. But nobody is going to resort to anything more than mail or phone calls to collect $199. It isn’t worth any more effort.

Take care,


Many thanks for your replies.

Is there anything in the “Notice of Litigation and Demand Letter” that spells out why the particular amount of $199 is being demanded?

Also, is there anything in that document concerning what they intend to do to the extent your mother declines to pay either the demand or settlement amount?

Yes, the letter states:

"According to the SEC filings by ATP, the company’s ability to declare and pay cash dividends and make other distributions with respect to ATP’s capital stock, including the Preferred Stock, was limited by the terms of ATP’s outstanding indebtedness and by applicable Texas law.

ATP’s Board of Directors authorized and/or ratified three payments of preferred stock dividends of $1.99 per share on Preferred Stock, which were to be paid on or about January 3, 2012, on or about April 1, 2012 and on or about July 1, 2012. ATP filed its Chapter 11 bankruptcy case less than ninety (90) days after the last dividend payment. The Adversary Proceeding alleges that these payments were made based on an attempt to hinder, delay or dread creditors.

Records produced by (my mother’s broker) indicate that you have received $199.00 in distributions on shares of preferred stock in ATP Oil & Gas Corporation in January 2012, April 2012 and July 2012. As such, we are investigating filing a lawsuit against you for the full recover of $199.00."

There’s more, after which they say they are “willing to offer a settlement of $99.50, contingent on approval from the Bankruptcy Court in this matter…”

So maybe it’s a scam, but I don’t think so. I think it’s simply a disgruntled creditor that is trying to recoup their losses any way possible…

Thanks for the information.

It may not be a scam, but unless your mother was in on the allegedly fraudulent transfers, I don’t see how she can be liable.

I took a quick look at the complaint online, and it is the trustee for bankrupt estate going after the brokerage firms and, alternately, the investors who received dividends on shares of preferred stock. It looks like you mother was one of the preferred stick shareholders. But I still don’t see how the trustee can go after the shareholders. I"m not sure what I’m missing here.

In any event, maybe the trustee is hoping that out of the hundreds of shareholders, many will send them a check.

Wish I could be of more help.

1 Like

Sounds like mail fraud.

I think I might could have some fun with this.

Oh yeah. Fun.



I am by no means an expert, but there are certain structures of companies - MLPs - where you are not just a shareholder, but a shareholder owner. Meaning, you also have to file and pay taxes in every state the company does business as another example.

It may be a legitimate grievance and attempt to collect moneys from the owners.

Sorry to be of contrary opinion on this, but it may be a very real thing you’re seeing. An odd one to be sure.


I would make a call to your Mother’s broker and see if they have any information. If it is a scam, they have probably seen it before and could make you feel more comfortable ignoring it.

If it is real, they may be able to confirm that.

I have never heard of such a thing, keep us posted on what you learn. You will help the community.

Good luck,


You got me curious and I did a bit of poking around.

There is this:…

From what I can gather, the Rodney Tow who filed that is the trustee dealing with the bankruptcy. (“In trusteeship” is the state of the company until the bankruptcy is resolved.) That doesn’t mean it has to be paid, just that it at least is coming from someone who really is involved. Part of the job of the trustee is to collect whatever they can.

That document lists names and amounts. Several are for $199.00. I expect one of those names is familiar to you.

It also says the order it is seeking is to settle for half the amount.

Note also the phrase “this motion seeks an order”. It is NOT an order, but one MAY have been issued since.

All of which just adds to the confusion, but that’s all I’ve found.

Another group that might know something is here:…


a pox on these people and on what they are doing!

Forgive my useless contribution to this thread.


Thanks RHinCT - interestingly, my mother’s name is not on the list.

I’ll call her broker. Thanks to all for the helpful responses!

  • Khleb

Sounds like mail fraud.

I think I might could have some fun with this.

Yep, I was thinking you tell them the money is tied up with a Nigerian prince at the moment, but any day now there will be lots of money to pay the $199. Perhaps if they could send her $99 to free up her $199 it could happen even faster.