Alta Mesa Resources Inc. subsidiaries asked a Texas bankruptcy court to intervene after BCE-Mach III LLC said it could no longer finance a $320 million acquisition of the company's upstream and midstream assets.

According to an emergency motion filed March 10 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, the partnership between Bayou City Energy Management LLC and Mach Resources LLC said March 9 that it "no longer believes in good faith that it will be able to obtain all of the financing ... [and expressed its need] to obtain alternative financing" to consummate the transaction.

BCE-Mach III in January announced the purchase and sale agreements for assets owned by Alta Mesa Holdings LP and midstream arm Kingfisher Midstream LLC. The target date for closing the transactions was Feb. 12, the court document said, and the Alta Mesa subsidiaries noted that "the buyer does not have a 'financing out'" under the purchase and sale agreements.

"The buyer is either choosing not to use cash available to it to close the court-approved sale; or, worse, the buyer did not have the ability to consummate the transactions contemplated by the [purchase and sale agreements] it represented it had at the time the parties entered into the [purchase and sale agreements]," lawyers for the debtors wrote.

The subsidiaries asked the bankruptcy court to either force BCE-Mach III to "immediately close on the sales without the need for obtaining alternative financing" or "compel the buyer to obtain alternative financing," adding that the delay has caused the debtors' estates "significant harm."

Alta Mesa Resources filed for Chapter 11 bankruptcy in September 2019 after laying off about one-third of its 200 employees and writing down the value of its assets by $3.1 billion.