Barrow Shaver Resources Company, LLC filed a Chapter 11 Plan of Liquidation on February 19, 2026 in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. The Plan proposes to transfer all remaining property of the estate to a Liquidation Trust, which will be funded primarily from proceeds of a previously approved sale of the company's assets to TexOil Investments, LLC. The Plan establishes nine classes of claims and interests, with equity interests to be cancelled. The filing references an involuntary petition date, indicating the case originated as an involuntary bankruptcy proceeding.
The Proposed Liquidation Plan
The Plan is structured as a full liquidation. All remaining property of the debtor's estate will be transferred to a Liquidation Trust on the Effective Date, at which point the debtor will cease to exist and will be deemed dissolved without the necessity of filing dissolution documents with any governmental authority. The Liquidation Trustee, who will be selected by the debtor in consultation with the official committee of unsecured creditors, will administer claims, pursue retained causes of action, and distribute proceeds to creditors according to the priority scheme established under the Plan. The debtor's chief restructuring officer may serve as the Liquidation Trustee.
The Liquidation Trust Agreement will provide for separate series of interests, labeled Series A through G, corresponding to each class of claims. The Liquidation Trust is intended to terminate no later than three years after the Effective Date, with possible extensions of up to six months each if approved by the Bankruptcy Court.
Funding the Liquidation Trust
The Liquidation Trust will be funded primarily from the closing of three previously approved asset sales to TexOil Investments, LLC:
Lot 1 will generate $27,520,000, less deposits already paid to the debtor, subject to customary purchase price adjustments.
Lot 2 will produce a minimum of $16,240,000 (including the deposit already paid to the debtor), with the potential for up to $32,480,000 (inclusive of the $16,240,000) depending on the outcome of certain potential avoidance actions as defined in the Lot 2 asset purchase agreement. The remainder of the purchase price at closing will be paid as follows: $5 million transferred to a separate account to fund the prosecution of potential avoidance actions, $12,992,000 paid in cash, and $11,240,000 transferred to an escrow account to be released as title to various Lot 2 assets is cleared after closing.
Lot 3 will generate $10.00, less deposits already paid.
Treatment of Claims and Interests
The Plan classifies claims and interests into nine classes. Administrative claims, professional claims, priority tax claims, and gap period claims are not classified. Administrative claims will be paid in cash from a claims reserve. Priority tax claims and gap period claims will be paid in cash from the Liquidation Trust.
Class 1 — Secured M&M Lien Claims will receive Series A interests in the Liquidation Trust and treatment under Section 1129(b)(2)(A)(i) of the Bankruptcy Code to the extent of the value of the holder's interest in applicable property of the estate. Any excess will be treated as an unsecured claim in Class 5. A sub-class will be created for each M&M Lien Claim. These claims are impaired.
Class 2 — Other Secured Claims will receive Series B interests with treatment under Section 1129(b)(2)(A)(i) to the extent of the value of the holder's interest in applicable property of the estate, with any excess treated as an unsecured claim in Class 5. These claims are impaired.
Class 3 — Mineral Interest Claims will receive Series C interests in the Liquidation Trust. These claims are impaired.
Class 4 — Unsecured Convenience Class provides a mechanism for holders of general unsecured claims exceeding a specified threshold to elect to convert their claims to convenience claims in exchange for a fixed cash payment. The specific dollar amounts were not yet populated in the filing. These claims are impaired.
Class 5 — General Unsecured Claims will receive Series D interests and a pro rata share of available unencumbered Liquidation Trust assets, net of trust expenses. These claims are impaired.
Class 6 — Litigation Claims will receive Series E interests, paid pro rata from trust assets pari passu with Series D, F, and G interests. These claims are impaired.
Class 7 — Rejection Damage Claims will receive Series F interests with the same pari passu treatment. These claims are impaired.
Class 8 — Debtor Affiliate Claims will receive Series G interests with pari passu treatment. These claims are impaired.
Class 9 — Equity Interests of SOS-LMC, LLC and TLB Corp will be cancelled. This class is impaired and is deemed to reject the Plan.
Classes 1 through 8 are entitled to vote on the Plan.
Liquidation Trust Structure
The Liquidation Trust series structure establishes a distribution priority. Series A and B holders (secured claims) receive treatment under Section 1129(b)(2)(A)(i) to the extent of the value of their interest in applicable property of the estate. Series C holders (mineral interest claims) will be paid in full subject to sufficient funds remaining in the Liquidation Trust; otherwise, they will receive their pro rata share of remaining Liquidation Trust assets. Series D, E, F, and G holders will be paid in full subject to sufficient funds; otherwise, they will receive their pro rata share of remaining Liquidation Trust assets on a pari passu basis with each other.
The Liquidation Trustee will have authority to pursue estate causes of action, settle claims, sell non-cash assets, and make distributions without further Bankruptcy Court approval, subject to the terms of the Liquidation Trust Agreement and the Plan. The Trustee will also be authorized to employ professionals and compensate them in the ordinary course of business without further court order.
Executory Contracts and Unexpired Leases
All executory contracts and unexpired leases will be rejected as of the Effective Date, unless they: (1) were assumed and assigned to TexOil in connection with the sale; (2) were previously rejected or assumed by a final order; (3) are the subject of a pending motion to assume or reject on the Effective Date; (4) are subject to a motion to reject with a requested effective date after the Effective Date; or (5) have previously expired or terminated pursuant to their own terms. Insurance policies deemed to be executory contracts will be assumed by the Liquidation Trustee and will continue in accordance with their terms.
Claims for rejection damages must be filed within 21 days following service of the order approving rejection and will be treated as Class 7 claims.
Releases and Exculpation
The Plan includes releases by the debtor in favor of released parties, third-party releases by releasing parties, and exculpation provisions covering exculpated parties. These provisions carve out claims related to actual fraud, willful misconduct, or gross negligence as determined by a final court order. The debtor release also carves out claims against former directors and officers to the extent of available insurance coverage and preserves claims by former directors, officers, or employees who commenced litigation against the debtor prior to the Effective Date.
The Plan permanently enjoins holders of released, discharged, or exculpated claims from pursuing actions against the debtor, exculpated parties, or released parties.
Key Dates and Deadlines
The Plan filing date is February 19, 2026. The Effective Date will occur once all conditions precedent are satisfied, including closing of the sale, entry of a final confirmation order, establishment and funding of the claims reserve, execution of the Liquidation Trust Agreement, and appointment of the Liquidation Trustee.
Administrative claims must be filed within 30 days after the Effective Date. Professional fee claims must be filed within 45 days after the Effective Date. Rejection damage claims must be filed within 21 days following service of an order approving rejection.
Preservation of Causes of Action
The Liquidation Trustee will retain and may enforce claims, demands, rights, and causes of action that the estate may hold against any person, to the extent not satisfied, settled, or released under the Plan. The Trustee will not retain estate causes of action — including potential avoidance actions and the NETX litigation, as each are defined in the Lot 1 and Lot 2 asset purchase agreements — that were assigned to the winning bidder in connection with the sale.
Additional Provisions
On the Effective Date, the debtor will be deemed to abandon its membership interest in BSR Lone Star GP, LLC to the extent not otherwise abandoned under Section 554 of the Bankruptcy Code.
The debtor will procure directors and officers tail insurance covering a six-year period from the Effective Date.
No distribution will be made on account of an allowed claim if the amount has an economic value of less than $250.
The Plan provides that no interest will accrue or be paid on any claims from and after the involuntary petition date.
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