Rusty Gold Hydro-Testers, Inc.

341 MEETING OF CREDITORS

A 341 meeting is set for May 26 at 1 pm. It will be held by telephone due to COVID-19. You are allowed to call in or you can hire an attorney who can call in for you and ask questions.

The 341 meeting is conducted by the United States Trustee’s attorney and the Debtor’s representative – usually its CEO – is required to attend. Creditors are allowed to attend themselves or through counsel and ask the Debtor’s representative questions about the Debtor’s finances and why the Debtor is in bankruptcy.

Some topics that should be addressed at the 341 meeting include:

1. Why the Debtor’s former CEO resigned on January 27, 2020.
2. Whether management has been paid the salaries reported in the Debtor’s filings.
3. Details about the Debtor’s failure to pay payroll taxes and whether they are current since filing.
4. Connections between the Debtor and A&M Threaders and the circumstances of their lease.

UNSECURED CREDITORS MAKE UP MORE THAN 99% OF THE REPORTED DEBT

Unsecured creditors of Rusty Gold Hydro-Testers, including unsecured creditors of its “dbas” Catamount Oilfield Services and R & G Casing and Tubing, Inc., make up more than 99% of the reported debt of the company. It is vital that unsecured creditors have input into the future of the company.

The Debtor’s secured creditor, PNC Bank, called a $7,000,000 loan and released its lien on the Debtor’s assets in early 2020. This has resulted in the Debtor having very little secured and priority debt. The Debtor reports approximately $12.8 million in debt, of which $12.7 million is reportedly unsecured.

Creditors should form a Committee so they can have a voice in negotiations regarding the future of the company. In addition to being able to negotiate a plan of reorganization, a Committee could investigate the circumstances of the PNC loan call and the events that led the Debtor to file for bankruptcy more broadly.

LARGE CREDITORS ARE ALREADY INVOLVED

There are two general types of unsecured creditors in this bankruptcy case: large corporations and small, family businesses. In some instances, the large corporations are owed millions. They will undoubtedly hire their own lawyers to try to recover as much of that debt as possible. In fact, the two largest creditors – Hyundai Steel and TEDA TPCO America – both appeared in the case the same day it was filed.

Small businesses can’t trust these large corporations to try to get all unsecured creditors repaid. Instead, the large corporations will act in their own self-interest.

The Debtor is due to file additional financial and case information on May 18th, but waiting until that date could be fatal to unsecured creditors’ repayment prospects. The Debtor and its large corporation creditors are undoubtedly already negotiating.