Cuomo Dithers and Towns Like Gerry, NY Pay the Bill

Not only has NY Gov. Andrew Cuomo’s dithering and refusal to make a decision on whether or not to allow horizontal hydraulic fracturing in the state materially harmed tens of thousands of landowners and farmers in the state (not to mention all of those who would have had high-paying jobs in the industry), it’s also harmed taxpayers in places like Gerry (Chautauqua County), NY. Because Cuomo dithered and Norse Energy went bankrupt, a division of Norse, Norse Pipeline, also went bankrupt because the gas wasn’t available to run through their pipeline in places like Gerry. That pipeline was sold to Emkey and a court has just re-adjusted the assessment of that pipeline’s value–from $2,616,444 to $320,439, causing Gerry to lose $2,305,368 of its tax base. Not only that…
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NY High Court Rebuffs Norse Request to Re-hear Town Ban Case

nopeWe won’t bother to chronicle, once again, the long fight in New York State over the right of a town board with 3-5 members deciding that every resident in a township will lose the right to use their property the way they want to (even though property ownership is sacrosanct under the U.S. Constitution). In the People’s Republic of New York, the mob rules. The rule of law is out the window. And so, a few New York high court judges who want to retain their posts under Gov. Andrew Cuomo, decided nobody really reads the Constitution anymore anyway–and that local town boards (not individual landowners) will now decide whether or not shale drilling will take place (see Shale Drilling in NY is Over – High Court Upholds Town Bans). One of the litigants in the case was Norse Energy, forced into bankruptcy by New York’s now 6+ year moratorium on fracking. Norse took over leases from Anschutz Exploration and sued the Town of Dryden, NY over their idiotic frack ban. Based on a recent Colorado case that is similar (and found against so-called “home rule” by towns), Norse asked New York’s highest court to re-hear the case (see Norse Energy Appeals Town Ban Case Back to NY High Court). The crooked judges said “nope”…
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Norse Energy Appeals Town Ban Case Back to NY High Court

In April MDN reported on the rumors that Norse Energy, the ill-fated company that bet big on New York State with 180,000 acres of leased land in NY, had been sold at bankruptcy court (see Highest Bid for Norse Energy $2.65M – Was it Sold & Who Bid?). As we pointed out in the story, we don’t know if the company was actually sold, and if it was, who the actual buyer was. We still don’t know. What we do know is that the only thing left to sell were Norse’s leases, since they had already sold off all of the hard assets (see Lights Turned Off, Door Closed – Good Night, Norse Energy). However, the Norse trustee retained at least some of the leases assets so the company could continue their lawsuit against New York for bankrupting them. Try to get back at least some of that money. Then the double-whammy: The New York Court of Appeals (our highest court) ruled against Norse and said local towns can ban fracking (see Shale Drilling in NY is Over – High Court Upholds Town Bans). The new news, just coming to light for us, is that Norse appealed that decision back to the Court of Appeals for a second time, based on a recent decision in a Colorado court…
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JLCNY Says Appeal of Article 78 Lawsuit Decision is “Very Likely”

court gavelNew Yorkers continue to react to the dismissal of a court case brought by the 70,000-member Joint Landowners Coalition of New York (JLCNY) and Norse Energy against state officials to force them to release six-year-delayed fracking regulations (see NY Pro-Drillers Lose 2nd Important Shale Drilling Court Case). Below we have reaction from the JLCNY, which says it’s “very likely” to appeal the ruling from the lower NY court in Albany County, along with copies of the court decisions…
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NY Pro-Drillers Lose 2nd Important Shale Drilling Court Case

agony of defeatYet another defeat for shale drilling in anti-drilling New York. First, the most important case that will hamper drilling in the Empire State was lost just a few weeks ago (see Shale Drilling in NY is Over – High Court Upholds Town Bans). Yesterday, a lower court decided to toss out the “Article 78” lawsuit brought by the 70,000-member Joint Landowners Coalition of New York and Norse Energy against Gov. Andy Cuomo, DEC Sec. Joe Martens, and former Dept. of Health Sec. Nirav Shah (see D-Day: JLCNY Files Lawsuit Today Against Cuomo, Martens, Shah). The Article 78 lawsuit would have forced them to finally release new drilling rules as they are obviously colluding to stop the release. Other states take two years or less to review and allow shale drilling (see today’s story about North Carolina). It’s been over six years in New York, and with this decision, there is literally no end in sight…
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Shale Drilling in NY is Over – High Court Upholds Town Bans

stop-press.jpgThis is a very sad day indeed. We’ve just received word that New York’s highest court, the Court of Appeals, has reaffirmed two lower court rulings that allows entire townships in the state to strip away property owners’ rights to allow drilling, in contravention to the U.S. Constitution. The two cases, long chronicled here on MDN, are the “Middlefield” and “Dryden” cases (see NY Pro-Drillers File Final Briefs in Dryden/Middlefield Cases for background). What does it mean? In our opinion it means there will never be any meaningful shale drilling in New York. No driller in his right mind will roll the dice, lock up thousands of acres by spending millions of dollars, just to see it all disappear at the next town board election with a vote by 3 of 5 people. What a complete and utter tragedy this is for freedom-loving Americans who happen to live in the increasingly communistic state of New York. Below is a copy of the decision…
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Highest Bid for Norse Energy $2.65M – Was it Sold & Who Bid?

soldOn Friday two major stories developed involving Norse Energy. You may recall Norwegian-based Norse Energy rolled the dice and placed all their bets on shale drilling in New York State, leasing some 180,000 acres, of which 130,000 acres are in the Marcellus and/or Utica Shale region. Never in their wildest dreams did Norse believe it would take six years or more for the state to allow high-volume hydraulic fracturing. Things started to go downhill for Norse when landowners sued to say Norse did not have the right to continue the leases indefinitely (beyond five years) because of New York’s tardiness in approving fracking (see New Rough Patch for Norse Energy: Force Majeure Lawsuit). Eventually the state’s ongoing moratorium on fracking led to Norse’s bankruptcy (see Lights Turned Off, Door Closed – Good Night, Norse Energy). Norse sued the state to force it to release fracking regulations so their remaining asset, the leases, could be sold for at least some value to compensate investors (see Norse Energy Sues Gov. Cuomo to Force Release of Fracking Regs).

Here’s where it gets complicated. On Friday in U.S. bankruptcy court, three bids for the leases and other company assets were unsealed. The highest was for $2.65 million–which is pennies on the dollar compared to the value of the company just a year ago before NY’s action forced it into bankruptcy. The New York Post reported the company behind the winning bid was hedge fund Mason Capital. From what MDN is able to determine, that may not be correct. The highest bid was from Any Acquisition, LLC–which may or may not be backed by Mason Capital. More important, there has been no official word that the judge awarded the sale to anyone on Friday. Below we tackle a complex deal-in-the-making and sort it out with help from our friends at NGI’s Shale Daily, who did some proper, old-fashioned reporting and got the real goods…
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NY Hearing on JLCNY/Norse Lawsuit v Cuomo, Martens, Shah

On Friday a lower court judge heard testimony in the “Article 78” case brought by Norse Energy and the Joint Landowners Coalition of New York (JLCNY) against Gov. Cuomo, Dept. of Environmental Conservation Commissioner Joe Martens, and State Health Commissioner Nirav Shah–to force the release of new fracking regulations. Sadly, the man who is supposed to work for the residents of New York, Attorney General Eric Schneiderman, decided instead he works for the man-child who can’t make a decision, Andy Cuomo, so he filed a motion to dismiss the Article 78 lawsuit brought by Norse and the JLCNY (see NY AG Schneiderman Files to Dismiss JLCNY Lawsuit Against Cuomo). The judge on Friday held a hearing to consider that motion. Fortunately, the motion to dismiss was not granted. Not yet anyway.

The heart of Friday’s hearing centered on the issue of, “How long is long enough?” for the state to conduct a review and release new drilling regulations. We have quotes from various sources who were there. It was obvious the judge grilled the pro-drilling side harder than the rep from the AG’s office. However, near the end (as you’ll see below), the AG rep shot herself right in the foot and perhaps tilted the chances for the lawsuit to go forward in favor of Norse/JLCNY…
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NY Update: Norse/JLCNY Lawsuit Hearing Date Set for April 25

Sadly, politics in New York State have become so corrupt that even the State Attorney General, Eric Schneiderman, actively works against the interests of the people he’s sworn to protect–the citizens of New York State. Late last year Norse Energy sued Gov. Andrew Cuomo, DEC Commissioner Joe Martens and State Health Commissioner Nirav Shah over their collusion to stop shale drilling in the state (see Norse Energy Sues Gov. Cuomo to Force Release of Fracking Regs). Later, the 70,000-member Joint Landowners Coalition of New York joined that lawsuit (see D-Day: JLCNY Files Lawsuit Today Against Cuomo, Martens, Shah).

How has AG Schneiderman reacted? By filing to dismiss the lawsuits and delay (see NY Attorney General Files to Dismiss Norse Lawsuit, More Delays). It’s utterly shameful. The lawsuit was scheduled for a hearing first in January, then moved to February, then March, and now April. It appears Norse and the JLCNY, whose cases are now tied together, will finally get a hearing at the end of April–on the 25th…
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NY Attorney General Files to Dismiss Norse Lawsuit, More Delays

The government of the State of New York–or rather certain government officials–continue to deny justice to residents in the state. The state’s supposed chief defender of the law, Attorney General Eric Schneiderman, unbelievably has filed a motion to dismiss the Article 78 case filed by Norse Energy that would compel Gov. Andrew Cuomo, DEC Commissioner Joe Martens and State Health Commissioner Nirav Shah to stop their intentional obstruction and finalize shale drilling rules. Norse, and the residents of New York, have been denied justice for 5 1/2 long years, and now Schneiderman doesn’t even want to allow those people their day in court. The attempt, if successful, would be an unimaginable miscarriage of justice by the highest officials in the state. It is, in fact, government tyranny of its residents.

Norse’s legal beagle, Tom West, has filed a counter motion to the AG’s motion that points out the arrogance and huge legal holes in the AG’s arguments. In addition to delaying a hearing that was first set in January, then moved by the court to March, and now moved again to “sometime in April,” the court that will hear the case (Albany County Supreme Court) has decided to join a similar case brought by the 70,000-member Joint Landowners Coalition of New York to the Norse Energy case. West believes the AG will try to dismiss the JLCNY case as well (Schneiderman has no shame and actively works against his own constituents). Below is an update from The West Firm along with an announcement from the JLCNY about the further delay in their case…
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NY Pro-Drillers File Final Briefs in Dryden/Middlefield Cases

court gavelAccording to Tom West, lead attorney in the New York “Dryden” court case that seeks to overturn bad lower court decisions that allow towns to completely ban fracking, the “last word” has been now been filed by landowners and (in the case of West’s client), drillers like Norse Energy. West, via his blog site, announced two days ago that the final briefs with counter-arguments have been filed for both the Dryden and Middlefield cases (copies of both final briefs are embedded below). According to West, additional friend-of-the-court briefs (called amicus briefs) will still be filed, but until oral arguments are heard in a few months, this is the final word from our side of the isle. Interestingly, when you read through the two briefs, they each make slightly different arguments–perhaps increasing the odds that something will resonate with the justices.

Here’s what West says via his blog site about the filings:
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Norse Energy Sues Gov. Cuomo to Force Release of Fracking Regs

Stop Press!

Newly appointed Norse Energy lawyer Tom West (from Albany) is a man of his word. He says what he means and means what he says. Exactly two weeks ago West had a “demand” letter hand-delivered to NY Dept. of Environmental Conservation (DEC) Commissioner Joe Martens. The letter, “demanding” to have a release date for the now 5 1/2 year-old draft fracking regulations, was also delivered to State Health Commissioner Nirav Shah and to Gov. Andrew Cuomo himself (see Tom West Demands DEC Com. Martens Release the SGEIS – Soon). The unstated threat was that if there is no response, West fully intends to file an Article 78 lawsuit against all three to force the release. Article 78 is a provision that makes recalcitrant (and ineffective) government officials do their job.

Yesterday afternoon West made good on the threat and filed the lawsuit (see a full copy embedded below). Among the justifications for requesting the court to force the release of the fracking regulations (called the SGEIS), is this “hit it out of the park” statement:
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Norse Energy Suing NY Gov Cuomo to Force Release of SGEIS

Breaking newsThis is BIG news: It seems we haven’t heard the last from Norse Energy–the Norwegian-based driller that just over a month ago converted from Chapter 11 bankruptcy, or “keep the creditors at bay while we reorganize,” to Chapter 7, or “sell off the furniture and turn off the lights” (see Lights Turned Off, Door Closed – Good Night, Norse Energy). There’s still a bit of fight left in Norse–or fight left in its creditors anyway. Late last week MDN received a tip from friend and intrepid blogger Andy Leahy, writer of the excellent NY Shale Gas Now! blog, about some of the biggest New York news we’ve heard in some time: Norse Energy, or what’s left of it, has decided to file a lawsuit against New York Gov. Andrew Cuomo, Dept. of Environmental Conservation (DEC) Commissioner Joe Martens, and State Health Commissioner Nirav Shah–a lawsuit that will force the release of draft drilling regulations called the SGEIS (Supplemental Generic Environmental Impact Statement).

The official lawsuit has not yet been filed but according to MDN’s sources, it will be filed in early December. This story is a bit complicated, so we’ll break it down for you and show you the evidence we have that a lawsuit against the Cuomo/Martens/Shah cabal is indeed on the way–very soon…
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Lights Turned Off, Door Closed – Good Night, Norse Energy

light switch offIt’s a sad day for New York landowners–for everyone really. Norse Energy has converted from Chapter 11 bankruptcy, which means the courts protect you while you regroup, to Chapter 7, which means break it all up and sell off the pieces to the highest bidder. Norse has now literally, as well as figuratively, shut off the lights and closed the door behind them. The remaining eight employees of Norse have just been let go.

For years MDN has been writing about the plight of Norse and their inability to tap shale deposits under 130,000 acres of leased land in New York. The signs have been there for some time that Norse may face extinction if NY does not open up for shale drilling (see Norse Energy 2Q13: Concerned About Remaining ‘a Going Concern’). Thanks Gov. Andy! You sure know how to make NY “business friendly.” Norse announced the change to Chapter 7 last week in a very brief press release. Buffalo Business First reports about the final employees being shown the door…
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Norse Energy 2Q13: Concerned About Remaining ‘a Going Concern’

MDN told you a few days ago about the sad state of affairs at Norse Energy (see Norse Can’t Dump NY Leases at Auction, Creditors Get Ready to Sue). The company released their second quarter update today (full copy embedded below). The update is based  on the assumption the company will remain “a going concern.” They state that if they can’t sell their 130,000 acres of New York leases at a decent price, they’ll have to turn the lights off and walk away. The company is currently under bankruptcy protection and has been ordered to sell their last remaining asset–the leases.

One item from the 2Q13 update that caught our attention is that a group of approximately 60 landowners with a collective 6,000 acres are suing Norse to end their leases. Norse had invoked force majeure on the leases–a legal maneuver that states, roughly, “due to a circumstance beyond our control we’re extending the original lease term.” Of course the unforeseen circumstance is the now 5+ year moratorium on drilling in New York. If Norse starts losing already-signed leases left and right, they’ll have no assets left to sell at auction, so they are vigorously fighting the action by the landowners…
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Norse Can’t Dump NY Leases at Auction, Creditors Get Ready to Sue

Norse Energy, the little energy that ultimately couldn’t (drill, because of Andrew Cuomo), bet big on New York State. It was the wrong bet. Norse holds 130,000 acres of leases in New York and literally bet the company’s future on New York’s willingness to allow fracking. The company lost the bet when they went into bankruptcy last year and finally had to put the only assets they had left on the auction block–130K leased acres–earlier this year (see Bankrupt Norse Energy to Sell NY Leases – Who Will Want Them?). As we stated at the time, who would be willing to purchase the Norse leases with a) Cuomo still not decided on whether drilling can happen in NY, and b) the courts still not decided about whether towns can ban drilling. Our answer: no one will be willing.

Norse has confirmed our logical deduction. The company issued a short statement yesterday stating they received a few low-ball bids for the leases, but the bid amounts are not near enough to satisfy creditors left holding the bag. Those creditors are now looking at filing lawsuits against Norse and its management…
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