SUBLETTE COUNTY – Hit once after setting their budgets and not adjusting them for uncollected taxes, county entities could get hit again after a company that filed bankruptcy is suing Sublette County for a refund of $2.4 million in taxes already paid.
Earlier this year, Sublette County Treasurer Roxanna Jensen traveled to bankruptcy court in Texas, to testify and provide proof the defunct Vanguard Natural Resources, LLC., owes Sublette County $2.4 million in assessed tax valuation for the second half of 2016.
However, Jensen was served with legal documents earlier this week, demanding a $2.4 million refund and interest for the first half taxes that were previously paid.
In June, the county was left scrambling and moving funds to cover smaller boards and entities that set their 2017-2018 budget based on the county’s 2016 assessed valuation. The problem was that Vanguard paid the first half of taxes, but then the company filed bankruptcy. That meant Sublette County received $2.4 million less than initially budgeted for the second half taxes due.
While larger entities have cash reserves to continue paying bills, even if there is a shortfall, smaller entities, including the Sublette County Library system, were left unable to make payroll at the end of the 2017 fiscal year. The county made loans to those entities with the intent to collect the funds when Sublette County wins the lawsuit in bankruptcy court and Vanguard would be forced to pay back taxes.
Sublette County is one of six counties in Wyoming left high and dry with the bankruptcy. However, Sublette County is the only one to file a claim and make the effort to travel to Texas to testify and present evidence in the United States Bankruptcy Court for the Southern District of Texas Houston Division.
Vanguard filed Chapter 11 bankruptcy on Feb. 1, 2017, and filed a reorganization plan on July 31, 2017. On Jan. 1 of each year, counties in Wyoming assess an ad valorem tax on oil and gas production within the county. Those taxes must be paid by Dec. 31 to ensure there is no penalty.
After receiving a Sept. 1, 2016, invoice due on Dec. 31, 2016, Vanguard paid $2,490,829.74 to the county on Jan. 31, 2017.
The lawsuit filed by Vanguard claims the transfer was made in the 90 days prior to filing the bankruptcy petition,when only “preferential transfer” payments should have been made to first-lien holders.
The lawsuit maintains the company had more than $1.3 billion in liens held by first and second lendors that should have been given preference over the money owed to Sublette County.
Vanguard is asking the court to void the payment made to the county, dismiss further claims by Sublette County for the second-half assessment due and require the county to repay the $2.4 million as well as any interest due since Jan. 31, 2017.