Trump Admin Gives Bankrupt Big Oil Corporation A $10 Million Bailout
Forbes Energy Services, Which Is Also Currently Being Sued for the Death of An Employee, Is Latest Energy Company With Shady Past To Get PPP Bailout
HELENA, MT – According to new research from Accountable.US, oil and gas company Forbes Energy Services received $10 million from the Paycheck Protection Program, even though the company filed for bankruptcy in 2017. Forbes Energy Services has also been fined for workplace safety violations, and is currently being sued by the family of a former employee who died in a well explosion earlier this year.
“Being a financially irresponsible corporation seems to be a prerequisite for getting a bailout from the Trump administration,” said Jayson O’Neill, Accountable.US spokesperson. “The administration’s pattern of giving billions in taxpayer-funds to Big Oil corporations with corrupt pasts is an insult to the real small business owners who are still waiting on much-needed relief to keep their businesses afloat.”
Forbes Energy Services has had continued financial troubles since filing for bankruptcy, reporting $68.3 million in losses in 2019. According to SEC filings, there is concern surrounding Forbes’ “substantial net losses” and it’s possible the company could default on its debt.
The Trump administration has prioritized bailouts for the oil and gas industry during the coronavirus pandemic over support for working families. In just the first two weeks of the Small Business Administration’s Payroll Protection Program, oil, gas and mining companies got a whopping $3.9 billion in PPP funding, even though the program was designed to help small businesses, not publicly traded corporations.
In its bailing out of extractive resource corporations, the administration has given PPP funding to a foreign-owned uranium mining corporation with ties to the Trump administration, an Indiana-based coal corporation with a former Trump official as its lobbyist, oil corporations that spent millions on stock buybacks, and to an oil services company that was under federal investigation just to mention a few.
Accountable.US has been tracking the administration’s response to COVID-19. TrumpBailouts.org documents the billion-dollar corporations and other large companies that have received taxpayer assistance under the CARES Act, and what advantages and assets they had going into the COVID-19 crisis that most small businesses could never access.
The Trump Administration Gave A $10M Bailout To A Company That Filed For Bankruptcy And Is Embroiled In A Wrongful Death Lawsuit.
Forbes Energy Services Got $10M From The Trump Administration Despite Continued Financial Failings After Filing For Bankruptcy.
On May 15, 2020, Forbes Energy Service Received A $10M Bailout From The Trump Administration…
Forbes Energy Services Got $10,000,000 In Funding From The Paycheck Protection Program. “On May 15, 2020, Forbes Energy Services LLC (“FES LLC”), a subsidiary of Forbes Energy Services Ltd. (the “Company”), obtained an unsecured $10 million loan (the “PPP Loan”) under the Paycheck Protection Program from Texas Champion Bank. The Paycheck Protection Program was established under the recently congressionally-approved Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration. In accordance the requirements of the CARES Act, the Company intends to use the proceeds of the PPP Loan for payroll costs, mortgage interest, rent or utility costs.” [SEC EDGAR – Forbes Energy Services 8-K, 05/21/20]
Forbes Energy Services Is An Oil And Gas Company. “Forbes Energy Services Ltd., or FES Ltd., is an independent oilfield services contractor that provides a wide range of well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include well maintenance, completion services, workovers and recompletions, plugging and abandonment, tubing testing, fluid hauling and fluid disposal. Our operations are concentrated in the major onshore oil and natural gas producing regions of Texas, with an additional location in Pennsylvania.” [SEC EDGAR – Forbes Energy Services 10-K, 03/23/20]
…Despite Continuing To Lose Millions After Filing For Bankruptcy…
Forbes Energy Services Filed For Bankruptcy In January 2017. “On January 22, 2017, FES Ltd. and its then domestic subsidiaries (collectively, the “Debtors”), as predecessors to the Company, filed voluntary petitions, or the Bankruptcy Petitions, for reorganization under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas-Corpus Christi Division, or the Bankruptcy Court, pursuant to the terms of a restructuring support agreement that contemplated the reorganization of the Debtors pursuant to a prepackaged plan of reorganization, as amended and supplemented, the Plan. On March 29, 2017, the Bankruptcy Court entered an order confirming the Plan. On April 13, 2017, or the Effective Date, the Plan became effective pursuant to its terms and the Debtors emerged from their chapter 11 cases.” [SEC EDGAR – Forbes Energy Services 10-K, 03/23/20]
Forbes Energy Services Had $68,399,000 In Losses In 2019. [SEC EDGAR – Forbes Energy Services 10-K, 03/23/20]
There Continues To Be Going Concern Around Forbes Energy Services Finances After “Substantial Net Losses” And Risk Of Defaulting On Debts. “The Company has incurred substantial net losses and losses from operations for the years ended December 31, 2019 and 2018. As of December 31, 2019, the Company had cash and cash equivalents of approximately $5.2 million. The Company has access to a working capital facility that is based on the Company’s accounts receivable and, as of December 31, 2019, had $4.1 million available to borrow under such facility. The Company’s Revolving Loan is due January 2021, which is within the 12-month going concern evaluation period and in addition has covenant provisions that cause the Company to be in default due to the modification of its independent auditors opinion with the inclusion of the emphasis of matter paragraph related to going concern (“Going Concern Opinion”). This covenant violation in the Revolving Loan Agreement allows the loan to be due on demand. Current negotiations to extend the maturity date have not been successful however a waiver for the Going Concern Opinion was obtained providing relief of default from the covenant violation through June 30, 2020. There can be no assurance that the Company will be able to negotiate an extension on the Revolving Loan, obtain future waivers, or have sufficient funds to repay such obligations when they come due. As of December 31, 2019, the Company has $4.0 million outstanding under its Revolving Loan, which is recorded as a current liability.” [SEC EDGAR – Forbes Energy Services 10-K, 03/23/20]
…And Continuing To Stuff The Pockets Of Their Executives.
Forbes Energy Services Paid Its Executives A Total Of $1,893,240 In 2019. “The compensation committee determined that the base salary of Messrs. Crisp, Cooper, Macek and Michetti of $652,224, $432,508, $408,774 and $400,000, respectively, should remain unchanged for 2019.” [SEC EDGAR – Forbes Energy Services DEF 14A, 04/25/19]
- John Crisp, L. Melvin Cooper, Steve Macek, And Joe Michetti Are Executives Officers At Forbes Energy Services. “John E. Crisp is our President and Chief Executive Officer and was appointed to such offices and elected as a director and Chairman of the Board upon the Company’s formation effective April 11, 2008. […] L. Melvin Cooper is our Senior Vice President, Chief Financial Officer and Secretary and was appointed to such offices upon the Company’s formation effective April 11, 2008. […] Steve Macek is our Executive Vice President and Co-Chief Operating Officer and was appointed to such offices on April 14, 2017. […] Joe Michetti is the President and Co-Chief Operating Officer of Forbes Energy Services LLC, the principal operating subsidiary of the Company, and was appointed to such office on November 16, 2018.” [SEC EDGAR – Forbes Energy Services DEF 14A, 04/25/19]
Forbes Energy Services Has Been Fined For Workplace Safety Violations And Is Currently Being Sued For The Death Of An Employee While Working On A Well.
Forbes Energy Service Is Being Sued After A Well Explosion That Killed 3 People…
Forbes Energy Service Employees Were Working On A Well In January 2020 When An Explosion Killed Three People And Injured One. “In January 2020, a well control incident occurred on a producing well operated by a third party. Three fatalities and one injury are documented. The Company was one of the contractors engaged to perform a workover operation on the subject well. Lawsuits have been filed against the operator of the well and the engaged contractors, including Forbes. The Company will assert indemnification claims against the operator and the engaged contractors. The Company is cooperating with regulatory investigations, which are in early stages, and as a result, is unable to estimate a possible range of loss, if any, at this time.” [SEC EDGAR – Forbes Energy Services 10-K, 03/23/20]
Forbes Energy Services And Three Other Oil Companies Are Being Sued Over The Wrongful Death Of A Oil Well Working Following An Explosion. “Chesapeake Energy Corp. and three oilfield service firms were sued by the daughter of a worker who suffered fatal injuries when a Texas oil well exploded in flames last month. The wrongful death suit seeks at least $1 million from Chesapeake Energy, Forbes Energy Services, Eagle Pressure Control and Halliburton Co. It was filed this week in Harris County District Court by Madison Hendrix, whose father, Brad Hendrix, died in a hospital days after the blast.” [Claims Journal, 02/10/20]
…And Forbes Energy Service Has Been Fined In The Past For Violating Workplace Safety.
Forbes Energy Services Was Fined $5,355 For A “Workplace Safety Or Health Violation” In 2014. [Violation Tracker, accessed 05/22/20
Forbes Energy Service Has 786 Employees, Well Over The 500 Employee Limit Of The Small Business Administration.
Forbes Energy Service Has 786 Employees. “As of December 31, 2019, we had 786 employees.” [SEC EDGAR – Forbes Energy Services 10-K, 03/23/20]
The Small Business Loans From The Paycheck Protection Act Were Intended For Companies With 500 Or Fewer Employees. “Small businesses, nonprofit organizations and tribal business concerns that meet the SBA’s standard business-size definition and veterans organizations organized under 501(c)(19) with fewer than 500 employees are eligible for loans under the program.” [Washington Post, 04/28/20]