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15-52159-cag Doc#24 Filed 09/16/15 Entered 09/16/15 15:37:39 Main Document Pg 1 of 388

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

In re: JM OILFIELD SERVICE, INC. Debtor

? ? CHAPTER 7 CASE ? ? CASE NO. 15-52159-CAG ? ?

STATEMENTS OF LIMITATIONS AND DISCLAIMERS REGARDING THE DEBTOR'S SCHEDULE OF ASSETS AND LIABILITIES AND STATEMENT OF FINANCIAL AFFAIRS

The above-captioned debtor (the "Debtor") is filing its Schedule of Assets and Liabilities (the "Schedules") and Statement of Financial Affairs (the "Statements" and, with the Schedules, the "Schedules and Statements") in the United States Bankruptcy Court for the Western District of Texas (the "Bankruptcy Court"). The Debtor, with the assistance of certain of their advisors, prepared the Schedules and Statements in accordance with section 521 of title 11 of the United States Code (the "Bankruptcy Code") and Rule 1007 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules").

These Statements of Limitations and Disclaimers Regarding the Debtor's Schedule of Assets and Liabilities and Statement of Financial Affairs (collectively, the "Limiting Statements") pertain to, are incorporated by reference in, and comprise an integral part of, the Schedules and Statements. These Limiting Statements should be referred to and reviewed in connection with any review of the Schedules and Statements.

The Schedules and Statements have been prepared by James Boston, in his capacity as the sole remaining officer and director of the Debtor on the Petition Date. In preparing the Schedules and Statements, Mr. Boston relied on data and information derived from the Debtor's books and records as were available at the time of preparation. Due to the exigent financial circumstances which compelled the filing of the Voluntary Petition, preparation of these Schedules and Statements of Affairs did not commence until after the Petition Date. The ability to provide complete and accurate information in response to each inquiry contained herein was hampered by the lack of employees who had responsibility for maintaining the financial records of the Debtor and the Debtor's efforts to secure its important business records at a remote location and delivery of those records to the Trustee upon his appointment in this case. Finally, the Debtor's management as of the Petition Date took control over the Debtor's affairs and operations on March 16, 2015 in an effort to turnaround the Debtor's distressed financial situation. Management found the Debtor's financial records to be inaccurate, incomplete and seriously lacking in reliability.

As a result of these deficiencies, the Debtor is unable to provide comprehensive responses to inquiries in these Schedules and Statements requiring information pre-dating March 16, 2015. Further, while Mr. Boston and his advisors have made reasonable efforts to ensure that information contained in these Schedules and Statements of Affairs is as accurate and complete as possible under the circumstances based on the information available to them at the time of preparation, the Debtor lacked adequate information needed to represent that the information contained herein is complete and entirely accurate.

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Limiting Statements Control. Except where otherwise indicated, in the event that the Schedules and Statements differ from the Limiting Statements; the Limiting Statements shall control.

Reservation of Rights. Nothing contained in the Schedules and Statements or these Limiting Statements shall constitute a waiver of any of the Debtor's rights or an admission with respect to this chapter 7 case, including, but not limited to, any issues involving objections to claims, equitable subordination, defenses, characterization or recharacterization of contracts, assumption or rejection of contracts under the provisions of chapter 3 of the Bankruptcy Code and/or causes of action arising under the provisions of chapter 5 of the Bankruptcy Code or any other relevant applicable laws to recover assets or avoid transfers.

Amendment. Although reasonable efforts were made to file complete and accurate Schedules and Statements, inadvertent errors or omissions may exist. Thus, the Debtor reserves the right to amend or supplement its Schedules and Statements from time to time as may be necessary or appropriate.

Basis of Presentation. Although these Schedules and Statements may, at times, incorporate information prepared in accordance with generally accepted accounting principles ("GAAP'), the Schedules and Statements do not purport to represent that they were prepared in accordance with GAAP. Where the value of assets is stated in the Schedules, the basis for the stated values is the book value stated in the Debtor's financial records, unless stated otherwise in the Schedules.

Undetermined Amounts. The description of an amount as "unknown" or "$0.00" is not intended to reflect upon the materiality of such amount. Creditors identified as "Notice Only" were listed on the Debtor's Schedules and Creditor Matrix in an abundance of caution and to insure the broadest possible notice to parties who have had prior dealings with the Debtor. The Debtor does not believe that it is indebted to Notice Only creditors in any amount.

Wage Claims of Employees. The Debtor paid its hourly wage employees two weeks in arrears. On the Petition Date a payroll for the preceding two weeks was due to employees. As of the Petition Date, the Debtor was only in possession of employee time sheets for one of the two weeks for which payroll is owed. The Debtor has no records reflecting employee hours worked for the second week for which payroll is due. Accordingly, the Debtor cannot accurately state the amounts owed to employees for pre-petition wages in Schedule E. Scheduling such employee claims as "Unknown" is not intended as an expression of the amounts owed to employees; rather it reflects the lack of records required to calculate the wage claims of employees.

Classifications. Listing a claim (a) on Schedule D as "secured," (b) on Schedule E as "priority," (c) on Schedule F as "unsecured priority," or (d) listing a contract or lease on Schedule G as "executory" or "unexpired," does not constitute an admission by the Debtors of the legal rights of the claimant or a waiver of the Debtors' right to recharacterize or reclassify such claim or contract. Further, at the time of the preparation of these Schedules, the Debtor's advisors did not have access to the security agreements, leases and other contracts and agreements governing the relationship of the Debtor with its equipment lenders and lessors. Accordingly, Debtor has characterized all such relationships as "secured creditors" and listed them on Schedule D.

Claims Description. Any failure to designate a claim on a given Debtor's Schedules as "disputed," "contingent," or "unliquidated" does not constitute an admission by the Debtor that such amount is not "disputed," "contingent," or "unliquidated." The Debtor reserves all rights to dispute, or to any offsets or defenses to, any claim reflected on its Schedules on any grounds, including, without limitation, amount, liability, validity, priority, or classification, or to otherwise subsequently designate any claim as "disputed," "contingent," or "unliquidated." Listing a claim does not constitute an admission of liability by the Debtor, and the Debtor reserves the right to amend the Schedules accordingly.

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Causes of Action. The Debtor, has not listed all of its causes of action (filed or potential) against third parties as assets in the Schedules and Statements. The Debtor reserves all of its rights with respect to any causes of action it may have and neither these Limiting Statements nor the Schedules and Statements shall be deemed a waiver of any such causes of action.

Schedule B Personal Property. All of the Debtor's personal property was in one of the following locations: (i) the Debtor's office or yard in Gonzales, Texas; (ii) the Debtor's yard in Three Rivers, Texas; (iii) the Debtor's office or yard in Quitman, Arkansas; and (iv) in certain limited instances, a small number of vehicles or trucks were in the possession of employees pending return to the Trustee. The Debtor lacks reliable information to provide meaningful estimates of the value of the vast majority of its personal property and therefore has listed the value as unknown as applicable.

Schedule D - Creditors Holding Secured Claims. Except as otherwise agreed pursuant to a stipulation and agreed order or general order entered by the Bankruptcy Court that is or becomes final, the Debtor reserves the right to dispute or challenge the validity, perfection, or immunity from avoidance of any lien purported to be granted or perfected in any specific asset to a creditor listed on Schedule D. Moreover, although the Debtor may have scheduled claims of various creditors as secured claims for informational purposes, no current .valuation of the Debtor's assets in which such creditors may have a lien has been undertaken.

Except as expressly waived by the Debtor or as provided by Court order, the Debtor reserves all rights to dispute or challenge the secured nature of any such creditor's claim or the characterization of the structure of any such transaction or any document or instrument related to such creditor's claim. The descriptions in Schedule D are intended only to be a summary. Reference to any applicable loan agreement and other relevant documents and a determination of the creditors' compliance with applicable law is necessary for a complete description of the collateral and the nature, extent, and priority of any liens. Nothing in the Limiting Statements or the Schedules and Statements shall be deemed a modification or interpretation of the terms of such agreements or related documents. The claims listed on Schedule D arose or were incurred on various dates and a determination of each date upon which each claim arose or was incurred would be unduly burdensome. Accordingly, not all such dates are included for each claim. All claims listed Schedule D, however, were incurred prior to the Petition Date.

Statements Question 3(b) and (c) - Payments to Creditors. As a result of the change of control over the financial affairs of the Debtor as of March 16, 2015, current management of the Debtor lacks adequate and accurate information regarding transfers to insiders prior to March 16, 2015. The Debtor's failure to list and transfer or payment to any insider prior to March 16, 2015 is not an admission that such transfer or payment did not occur.

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In re JM Oilfield Service, Inc.

Case No. 15-52159 (if known)

SCHEDULE A - REAL PROPERTY

Description and Location of Property

None

Nature of Debtor's Interest in Property

Current Value of Debtor's Interest in

Property, Without Deducting Any Secured Claim or Exemption

Amount Of Secured Claim

Total:

$0.00

(Report also on Summary of Schedules)

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In re JM Oilfield Service, Inc.

Case No. 15-52159 (if known)

SCHEDULE B - PERSONAL PROPERTY

None

Type of Property 1. Cash on hand.

Description and Location of Property

Cashiers Check #1049004788 - Payable to Indian Ink Leasing - never given to payee

Current Value of Debtor's Interest

in Property, Without Deducting

any Secured Claim or Exemption

$23,650.03

2. Checking, savings or other financial accounts, certificates of deposit or shares in banks, savings and loan, thrift, building and loan, and homestead associations, or credit unions, brokerage houses, or cooperatives.

Bank of America Acct ***1700 Bank of America Acct ***1713 Bank of America Acct ***1726 Bank of America Acct***1739 First Arkansas Bank and Trust Acct ***4294

$0.00 $34,747.08

$527.97 $74,270.74 $36,709.01

3. Security deposits with public utilities, telephone companies, landlords, and others.

4. Household goods and furnishings, including audio, video and computer equipment.

5. Books; pictures and other art objects; antiques; stamp, coin, record, tape, compact disc, and other collections or collectibles.

6. Wearing apparel.

7. Furs and jewelry.

8. Firearms and sports, photographic, and other hobby equipment.

Nations Equipment

Household Furnishings located at 2502 Alamo, Gonzales, TX (valued at cost)

pictures and art were removed from Quitman, AR offices on August 31, 2015 after hours - value, if any, not known

X X X

$535,000.00 $8,207.78 Unknown

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In re JM Oilfield Service, Inc.

Case No. 15-52159 (if known)

None

SCHEDULE B - PERSONAL PROPERTY

Continuation Sheet No. 1

Type of Property

Description and Location of Property

Current Value of Debtor's Interest

in Property, Without Deducting

any Secured Claim or Exemption

9. Interests in insurance policies. Name insurance company of each policy and itemize surrender or refund value of each.

Unearned premium, if any, on 2015 Property and Casualty insurance policies.

10. Annuities. Itemize and name

X

each issuer.

11. Interests in an education IRA as

X

defined in 26 U.S.C. ? 530(b)(1) or

under a qualified State tuition plan

as defined in 26 U.S.C. ? 529(b)(1).

Give particulars. (File separately

the record(s) of any such interest(s).

11 U.S.C. ? 521(c).)

12. Interests in IRA, ERISA, Keogh,

X

or other pension or profit sharing

plans. Give particulars.

13. Stock and interests in incorpo-

X

rated and unincorporated businesses.

Itemize.

14. Interests in partnerships or joint

X

ventures. Itemize.

15. Government and corporate bonds X and other negotiable and nonnegotiable instruments.

16. Accounts receivable.

Unfactored Accounts Receivable

Factor Reserve Account Allied Affilliated Funding 5151 Beltline Road, Suite 500 Dallas, Texas 75254

Unknown

$1,721,755.00 Unknown

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