Photo Credit: John Disney/ALM

A Delaware judge has ordered Bill Koch and his Oxbow Carbon energy firm to post a nearly $88 million bond before appealing a Delaware Court of Chancery decision to force the company's sale in order to compensate minority investors that were denied their right to a buyout in 2016.

Vice Chancellor J. Travis Laster on Wednesday granted the request from Crestview Partners and Load Line Capital, which had argued the bond was necessary to protect their interests while Oxbow appeals the case to the Delaware Supreme Court.

According to court documents, West Palm Beach, Florida-based Oxbow and the two investors agreed that the sale should be paused and that a search for a monitor to oversee the process should begin immediately. However, the sides differed on an amount for the bond, as well as other key issues in the wake of Laster's ruling.

Crestview and Load Line said in a brief last week that Oxbow had agreed after the ruling to secure only their part of the fees Oxbow paid to attorneys from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, the law firm that had initially represented Oxbow but later shifted its allegiance to Koch himself. But Oxbow, the firms said, refused to provide the information necessary to calculate the bond's value.

Crestview and Load Line said the bond should reflect compensatory damages awarded in the case, as well as the difference between the present value of their interest in Oxbow and the potential future value of their units following an appeal. According to court documents, the investors' bond request totaled at least $310 million.

Laster's ruling on Wednesday, outlined in an order for partial final judgment, directed Koch and Oxbow to lodge a $87.8 million bond with the Register in Chancery within 10 days of the order.

The order followed Laster's decision in February, which found that Koch—the brother of billionaires and conservative political activists Charles and David Koch—had improperly denied Crestview and Load Line their right as investors to seek an exit sale under Oxbow's LLC agreement.

Last month, Laster appointed a monitor to oversee Oxbow's sale and to ordered Koch to pay tens of million of dollars in sanctions for derailing a deal for the energy company.

Crestview and Load Line said in court documents that they feared Oxbow would drag its feet in complying with the sale and that Koch would take steps to make his company, one of the world's largest producers of petroleum coke, unattractive to potential buyers.

Oxbow said in briefing that Koch and the company had gone “beyond what the court required of them” and argued that an excessive bond request would prevent Oxbow from seeking an appeal.

Both parties agreed to an expedited appeals process. According to Laster's order, Oxbow's sale must conclude within one year of a final ruling on appeal.

As of early Thursday afternoon, no appeal had yet been filed.

Crestview and Load Line, meanwhile, have filed a books-and-records suit, seeking to investigate as much as $50 million in payments Oxbow made to Koch's Mintz Levin attorneys during the underlying litigation. Trial in that case is set for Nov. 5, on the papers.

Oxbow is represented by Kenneth J. Nachbar, Thomas W. Briggs Jr. and Richard Li of Morris, Nichols, Arsht & Tunnell and Michael S. Gardener, Breton Leone-Quick and R. Robert Popeo of Mintz, Levin, Cohn, Ferris, Glovsky. Koch is represented by Stephen C. Norman, Jaclyn C. Levy and Daniyal M. Iqbal of Potter Anderson & Corroon and David Hennes and C. Thomas Brown of Ropes & Gray.

Crestview is represented by Kevin G. Abrams, Michael A. Barlow, J. Peter Shindel Jr., Daniel R. Ciarrocki and April M. Ferraro of Abrams & Bayliss; Brock E. Czeschin, Matthew D. Perri and Sarah A. Galetta of Richards, Layton & Finger; and Michael B. Carlinsky, Jennifer J. Barrett, Chad Johnson, Sylvia Simson, Silpa Maruri of Quinn Emanuel Urquhart & Sullivan.

Load Line is represented by Dale C. Christensen Jr. and Michael B. Weitman of Seward & Kissel and J. Clayton Athey and John G. Day of Prickett, Jones & Elliott.

The case is captioned In re: Oxbow Carbon Unitholder Litigation.