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Natural Resources & Energy

Johnson County Faces Sanction As It Looks To Retrieve Back-Taxes

A truck and a worker of Carbon Creek LLC out by a natural gas well
Carbon Creek LLC

Johnson County is facing a new hurdle as it tries to receive more than $20 million in back-taxes from a coal-bed methane producer.

The northeastern Wyoming county filed a lawsuit against Carbon Creek Energy, LCC in November 2020 in order to receive unpaid production taxes dating back to 2016. Carbon Creek is the operator of US Realm Powder River's coal-bed methane wells, a company that’s in an ongoing bankruptcy case.

As the county seeks to retrieve taxes owed, or foreclose on its tax liens, US Realm is asking the court to hold Johnson County’s treasurer in contempt for violating an automatic stay.

In federal bankruptcy law, an automatic stay is put on any adversarial actions against a bankrupt party. While Carbon Creek is not a bankrupt party, US Realm Powder River attorney Brad Hunsicker argued Johnson County should not be able to enforce its lien as US Realm is the legal owner of the mineral leases and well interests in the lien notice.

Johnson County responded in an email that it has no intent of making any claim to property owned by US Realm.

"We have been very clear that in the case of Johnson County v. Carbon Creek, we are not seeking assets of U.S. Realm and that the John Does in our Complaint and Amended Complaint do not refer to U.S. Realm," read an email from Attorney Tom Bullock on May 18, 2021 filed in U.S. Realm's bankruptcy docket.

In addition to unpaid county taxes, an office within the U.S. Department of the Interior filed a proof of claim for millions of dollars in unpaid royalties.

The U.S. Bankruptcy Court District of Wyoming will be holding a hearing related to the situation on June 30.

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