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22 Case LSS Doc Filed 10/29/15 Page 1 of 51 EXHIBIT A

23 Case LSS Doc Filed 10/29/15 Page 2 of 51 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: QUICKSILVER RESOURCES INC., et al., 1 Debtors. Chapter 11 Case No (LSS) Jointly Administered THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, on behalf of the Debtors estates, Plaintiff, Adv. Pro. No. 15- (LSS) vs. THE BANK OF NEW YORK MELLON TRUST COMPANY N.A., as indenture trustee under that certain Indenture dated June 21, 2013 and as Second Lien Agent under that certain Mortgage, Deed of Trust, Assignment of As-Extracted Collateral, Security Agreement, Fixture Filing and Financing Statement dated June 21, 2013; CREDIT SUISSE AG, as administrative agent under that certain Second Lien Credit Agreement dated June 21, 2013; and LINDA DAUGHERTY, as trustee under that certain Mortgage, Deed of Trust, Assignment of As- Extracted Collateral, Security Agreement, Fixture Filing and Financing Statement dated June 21, 2013; and JOHN DOES 1 1,000, Defendants. COMPLAINT FOR DECLARATORY JUDGMENT AND FOR RELATED RELIEF AND OBJECTION TO CLAIMS The Official Committee of Unsecured Creditors (the Committee ) of Quicksilver Resources Inc. ( Quicksilver ) and its affiliated chapter 11 debtors and debtors-in-possession 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Quicksilver Resources Inc. [6163]; Barnett Shale Operating LLC [0257]; Cowtown Drilling, Inc. [8899]; Cowtown Gas Processing L.P. [1404]; Cowtown Pipeline Funding, Inc. [9774]; Cowtown Pipeline L.P. [9769]; Cowtown Pipeline Management, Inc. [9771]; Makarios Resources International Holdings LLC [1765]; Makarios Resources International Inc. [7612]; QPP Holdings LLC [0057]; QPP Parent LLC [8748]; Quicksilver Production Partners GP LLC [2701]; Quicksilver Production Partners LP [9129]; and Silver Stream Pipeline Company LLC [9384]. The Debtors address is 801 Cherry Street, Suite 3700, Unit 19, Fort Worth, Texas { W }

24 Case LSS Doc Filed 10/29/15 Page 3 of 51 (collectively, the Debtors ), by and through their attorneys, on behalf of and as representative of the Debtors estates, and based on knowledge, information, belief, and the results of its investigation to date, alleges as follows: NATURE OF ACTION 1. This adversary proceeding seeks: (i) a declaratory judgment that certain Unencumbered Property (defined below) of the Debtors is not subject to the liens or security interests of the Second Lien Collateral Agent (defined below), on behalf and for the benefit of the Second Lien Parties (defined below); (ii) a declaratory judgment that the Second Lien Collateral Agent s liens on or security interests asserted in certain Unencumbered Hydrocarbon Interests (defined below) are unperfected; (iii) an order avoiding the Second Lien Collateral Agent s unperfected liens on or security interests in certain property pursuant to sections 544, 550 and 551 of the Bankruptcy Code (defined below); (iv) recovery for the Debtors estates of all costs and expenses incurred in preserving the Second Lien Parties collateral pursuant to section 506(c) of the Bankruptcy Code; (v) a declaratory judgment that, based on the equities of the case, the Second Lien Collateral Agent does not hold any liens on or security interests in postpetition proceeds of any of the Second Lien Parties collateral; (vi) a judgment that the Second Lien Parties secured claims shall be reduced to the value of the Second Lien Collateral (defined below) subject only to perfected liens and any excess amount shall be reclassified as a general unsecured claim pursuant to section 502(d) of the Bankruptcy Code; (vii) a judgment that the Second Lien Parties claims under section 507(b) shall be disallowed; and (viii) disallowance of the Second Lien Parties claims asserted in these Chapter 11 Cases pursuant to sections 502 and 506 of the Bankruptcy Code until the Court enters judgment on this Complaint by final order. { W } 2

25 Case LSS Doc Filed 10/29/15 Page 4 of 51 JURISDICTION AND VENUE 2. This is an adversary proceeding pursuant to Rule 7001 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ). 3. The United States Bankruptcy Court for the District of Delaware (the, Court ) has jurisdiction over this complaint under 28 U.S.C. 1334(b), in that this is a civil proceeding relating to the underlying case arising under chapter 11 of title 11 the United States Code, 11 U.S.C. 101 et seq. (as amended and modified, the Bankruptcy Code ). 4. This adversary proceeding is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), (B), (K) and (O), and the Court may enter a final order consistent with Article III of the United States Constitution This Court has personal jurisdiction over Defendants pursuant to Bankruptcy Rule Venue of this adversary proceeding in this district is proper pursuant to 28 U.S.C and 1409(a). 7. The Committee has standing to pursue this Complaint by virtue of the Final Cash Collateral Order (defined below) and the Order Granting Motion of Official Committee of Unsecured Creditors for Leave, Standing and Authority to Prosecute Claims on Behalf of the Debtors Estates and for Related Relief [D.I. ]. THE PARTIES 8. The Committee is an official committee of unsecured creditors appointed in the Debtors chapter 11 cases by the United States Trustee for the District of Delaware on March 25, 2 Pursuant to Rule (f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, the Committee hereby confirms its consent to entry of a final order by this Court in connection with this Complaint if it is later determined that the Court, absent the consent of the parties, cannot enter final orders or judgments on any of the claims asserted herein consistent with Article III of the United States Constitution. { W } 3

26 Case LSS Doc Filed 10/29/15 Page 5 of under section 1102 of the Bankruptcy Code. The Committee consists of the following members: Ares Special Situations Fund IV, L.P., Trunkline Gas Company LLC, Wilmington Trust, National Association, as Indenture Trustee, Delaware Trust Company, as Indenture Trustee and U.S. Bank National Association, as Indenture Trustee. 9. The Committee is vested with, among other things, the powers described in section 1103 of the Bankruptcy Code, including the power to investigate the acts, conduct, assets, liabilities and financial condition of the Debtors. The Committee brings this action on behalf of the Debtors estates. 10. Defendant Credit Suisse AG is the administrative agent (the Second Lien Administrative Agent ) under that certain Second Lien Credit Agreement dated as of June 21, 2013 (the Second Lien Credit Agreement ) among Quicksilver, as borrower; the Second Lien Administrative Agent; JPMorgan Chase Bank, N.A., as syndication agent; Bank of America, N.A., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Wells Fargo Bank, National Association, as co-documentation agents; and the lenders party thereto (collectively, the Second Lien Lenders ), pursuant to which the Second Lien Lenders made available to Quicksilver a $625 million second lien term loan. The Second Lien Administrative Agent is named a defendant herein solely in its capacity as administrative agent under the Second Lien Credit Agreement. 11. Defendant The Bank of New York Mellon Trust Company, N.A. ( BONY ), is the trustee (the Second Lien Indenture Trustee ) and second lien collateral agent under that certain Indenture dated as of June 21, 2013 (the Second Lien Indenture ), among Quicksilver as issuer, certain subsidiary guarantors party thereto, and the Second Lien Indenture Trustee, pursuant to which Quicksilver issued certain second lien senior secured floating rate notes due { W } 4

27 Case LSS Doc Filed 10/29/15 Page 6 of (collectively, the Second Lien Notes, and any holder of the Second Lien Notes, the Second Lien Noteholders ). Additionally, BONY is the second lien agent and mortgagee under the Mortgages (defined below) and the pledgee under the Second Lien Pledge Agreement (defined below) (together with the Mortgages Trustee (defined below), the Second Lien Collateral Agent ). BONY is authorized to act as Second Lien Collateral Agent on behalf of the Second Lien Administrative Agent, Second Lien Lenders, Second Lien Indenture Trustee and Second Lien Noteholders (collectively, the Second Lien Parties ) pursuant to that certain Pari Passu Intercreditor Agreement dated as of June 21, 2013 (the Pari Passu Intercreditor Agreement ), among BONY, as second lien agent, the Second Lien Administrative Agent, as authorized representative for the Second Lien Credit Agreement, and the Second Lien Indenture Trustee, as trustee. BONY is named a defendant herein solely in its capacities as trustee and second lien collateral agent under the Second Lien Indenture, second lien agent and mortgagee under the Second Lien Pledge Agreement and Mortgages, and second lien collateral agent under the Pari Passu Intercreditor Agreement. 12. Defendant Linda Daugherty is the trustee under the Mortgages (defined below) (in such capacity, the Mortgages Trustee ) and is a party hereto solely in her capacity as the Mortgages Trustee. 13. John Does 1 1,000 are the Second Lien Lenders and Second Lien Noteholders whose identities are presently unknown to the Committee. The identities of John Does 1 1,000 will be determined through discovery in this proceeding. CASE BACKGROUND The Debtors Bankruptcy Cases 14. On March 17, 2015 (the Petition Date ), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the Court. The Debtors continue { W } 5

28 Case LSS Doc Filed 10/29/15 Page 7 of 51 to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment of a trustee or examiner has been made in these chapter 11 cases. 15. On the Petition Date, the Debtors filed the Debtors Motion for Entry of Interim and Final Orders (A) Authorizing the Use of Cash Collateral, (B) Granting Prepetition Secured Parties Adequate Protection, (C) Scheduling a Final Hearing, and (D) Granting Related Relief [D.I. 16] (the Cash Collateral Motion ). 16. On March 19, 2015, the Court entered the Interim Order Under 11 U.S.C. 105, 361, 362, 363 and 507, and Bankruptcy Rules 2002, 4001 and 9014 (I) Authorizing Debtors to Use Cash Collateral, (II) Granting Adequate Protection to Prepetition Secured Parties and (III) Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001(b) [D.I. 97]. The Final Cash Collateral Order 17. On May 1, 2015, the Court entered the Final Order Under 11 U.S.C. 105, 361, 362, 363 and 507, and Bankruptcy Rules 2002, 4001 and 9014 (I) Authorizing Debtors to Use Cash Collateral and (II) Granting Adequate Protection to Prepetition Secured Parties [D.I. 307] (the Final Cash Collateral Order ) Under the Final Cash Collateral Order, the Debtors granted to the Second Lien Collateral Agent security interests and liens on the Adequate Protection Collateral (which includes the Unencumbered Property (defined below)) (the Adequate Protection Liens ). See Final Cash Collateral Order 9(e). Additionally, the Final Cash Collateral Order provides that the Second Lien Adequate Protection Obligations are superpriority claims against the Debtors as provided in Bankruptcy Code section 507(b) junior to the First Lien 507(b) Claim, subject 3 Capitalized terms used herein but not otherwise defined shall have the same meanings ascribed to such terms as in the Final Cash Collateral Order. { W } 6

29 Case LSS Doc Filed 10/29/15 Page 8 of 51 and subordinate only to the Carve Out and the First Lien 507(b) Claim (the Diminution Claims ). Id. 9(d) In the Final Cash Collateral Order, the Debtors agreed to a series of stipulations and admissions (collectively, the Stipulations ) to facilitate the post-petition use of cash collateral. The consensual Final Cash Collateral Order did not contain any limitation on any party s rights to charge expenses against collateral of the Second Lien Parties pursuant to sections 506(c), see Final Cash Collateral Order 14 ( The limitation on the application of Bankruptcy Code sections 105(a) or 506(c) or any similar principle of law or equity shall not apply to any party other than the Global Administrative Agent and the other First Lien Parties. ), and 552(b) of the Bankruptcy Code. See id. 16 ( The limitation on the application of the equities of the case exception under Bankruptcy Code section 552(b) shall not apply to any party other than the Global Administrative Agent and the other First Lien Parties. ). The Stipulations 20. The Stipulations include, among other things, a release by the Debtors of all claims and causes of action in connection with the obligations under the Second Lien Credit Agreement (the Second Lien Credit Agreement Obligations ) or the Second Lien Credit Documents, a release by the Debtors of all claims and causes of action related to the obligations under the Second Lien Indenture (the Second Lien Indenture Obligations, and together with the Second Lien Credit Agreement Obligations, the Second Lien Obligations ) or the Second Lien Indenture Documents. Final Cash Collateral Order 4. In addition, the Debtors admitted, stipulated and agreed that the liens and security interests granted to the Second Lien Collateral Agent to secure the Second Lien Obligations pursuant to the Second Lien Guaranty Agreement, 4 The Final Cash Collateral Order does not determine priority between liens, charges or claims, if any, arising under Bankruptcy Code section 506(c) or 552(b) on the one hand and any 507(b) Claim on the other with respect to the Second Lien Parties. See Final Cash Collateral Order 17(b). { W } 7

30 Case LSS Doc Filed 10/29/15 Page 9 of 51 the Second Lien Pledge Agreement (defined below), the Mortgages (defined below) and any other Security Instruments are valid, binding, perfected, enforceable, second priority liens and security interests on the Prepetition Collateral and are not subject to objection, defense, contest, avoidance, recharacterization, reclassification, reduction or subordination[.] See Final Cash Collateral Order 4(l)-(r). 21. The Final Cash Collateral Order provides that the Stipulations become binding on the Debtors and any successor thereto upon entry of the Final Cash Collateral Order, and become binding on all other parties in interests, including the Committee, unless the Committee or any other party in interest files an adversary proceeding or contested matter challenging the validity, enforceability, priority or extent of the Prepetition Obligations or the liens on the Prepetition Collateral securing the Prepetition Obligations by the applicable Challenge Deadline. Final Cash Collateral Order 22. The Committee s Investigation 22. Following entry of the Final Cash Collateral Order, the Committee and its professionals commenced an investigation of, among other things, the validity, enforceability, priority and extent of the Second Lien Obligations, the liens on and security interests in the Debtors assets purportedly securing the Second Lien Obligations and potential claims and causes of action against the Second Lien Parties. 23. The Committee s investigation soon focused on the discrepancy between the Debtors description of the Second Lien Parties liens and security interests as stated in the Declaration of Vanessa Gomez LaGatta in Support of First Day Pleadings [D.I. 19] (the First Day Declaration ) and their admissions to the contrary in the Stipulations. Specifically, the { W } 8

31 Case LSS Doc Filed 10/29/15 Page 10 of 51 Stipulations provide that all Prepetition Collateral 5 is subject to valid, binding, perfected, enforceable, second priority liens and security interests granted to the Second Lien Collateral Agent, see Final Cash Collateral Order 4(r), while the First Day Declaration clearly states that certain material assets are unencumbered because, among other reasons, such assets are part of the collateral package [and thus, included in the definition of Prepetition Collateral], but as of the Petition Date, such interest [i.e., the liens on and security interests in the collateral] has not been perfected. First Day Declaration 28; see also Cash Collateral Motion According to the First Day Declaration, the Debtors material assets that are not included in the Second Lien Parties collateral, or assets that are collateral but not subject to perfected liens or security interests include, without limitation: (i) the oil and gas leases and wells owned by [Quicksilver] in Pecos County, Upon County, Reeves County, Presidio County, Culberson County and Crockett County, Texas, (ii) approximately 8.1% of the total value of proved hydrocarbon interests owned by [Quicksilver] in the Barnett Shale located in the Fort Worth basin of North Texas, pursuant to the last reserve report delivered prior to the date of [the Cash Collateral Motion], (iii) that certain Amended and Restated Intercompany Note, dated as of October 7, 2011 with a face value of approximately $413 million, (iv) approximately $167.5 million of cash and cash equivalents previously borrowed under the U.S. Credit Facility and currently deposited in certain investment accounts and (v) certain other non-oil and gas real property and the personal property related thereto including, but not limited to, surface lands, inventory and prepayments received by the Debtors. First Day Declaration 28. Despite the Debtors identification of material assets that are not included in the Second Lien Parties collateral or not subject to perfected liens, they nevertheless entered into the Stipulations that fail to designate specific assets that are included as collateral 5 Prepetition Collateral is defined in the Final Cash Collateral Order as the real and personal property of the U.S. Debtor Obligors constituting Collateral as defined in the Pledge Agreement and the Mortgage, respectively, including without limitation, oil and gas properties (and as-extracted collateral, goods, fixtures, hydrocarbons, books and records, documents, instruments, general intangibles and letter-of-credit rights deriving from or pertaining to the Mortgaged Property (as defined in the Mortgage), certain equity interests, accounts, contract rights and general intangibles consisting of the U.S. Debtor Obligors rights under Swap Agreements (all such Collateral, including the Cash Collateral and the setoff rights described in the U.S. First Lien Documents or arising by operation of law[.] Final Cash Collateral Order 4(d). { W } 9

32 Case LSS Doc Filed 10/29/15 Page 11 of 51 securing the Second Lien Obligations, waive the right to contest and challenge the Second Lien Lenders future assertion of liens on or security interests in any property of the Debtors estates, and provide (incorrectly) that all of the collateral securing the Second Lien Obligations is subject to valid, perfected liens and security interests. See Final Cash Collateral Order Notwithstanding the Stipulations, there are substantial, valuable assets of the Debtors that are either not included in the Second Lien Parties collateral or are subject to unperfected liens of the Second Lien Collateral Agent on behalf of the Second Lien Parties that may be avoided. FACTUAL ALLEGATIONS The Second Lien Credit Agreement and Second Lien Indenture 26. On June 21, 2013, the Debtors entered into the Second Lien Credit Agreement, pursuant to which the Second Lien Lenders made available to Quicksilver a $625 million second lien term loan scheduled to mature on June 21, 2019 and subject to prepayment under certain circumstances. The second lien term loan was made at 97% of par and resulted in net proceeds to the Debtors of $606.3 million. First Day Declaration 25. Upon information and belief, as of the Petition Date, the outstanding amount of the Second Lien Credit Agreement Obligations was approximately $625 million. 27. On June 21, 2013, Quicksilver also issued the Second Lien Notes, which were issued at 97% of par and resulted in net proceeds to the Debtors of $194 million. Id. 26. Upon information and belief, as of the Petition Date, the outstanding amount of the Second Lien Indenture Obligations was approximately $200 million. { W } 10

33 Case LSS Doc Filed 10/29/15 Page 12 of 51 The Collateral Documents: The Second Lien Pledge Agreement and Mortgages 28. In connection with the Second Lien Credit Agreement and Second Lien Indenture, Quicksilver, Cowtown Pipeline Management, Inc., Cowtown Pipeline Funding, Inc. and QPP Parent LLC and each of the other pledgers entered into that certain Pledge Agreement dated as of June 21, 2013 (the Second Lien Pledge Agreement ) in favor of the Second Lien Collateral Agent, as pledgee. Pursuant to the Pledge Agreement, Quicksilver and its subsidiary pledgers purportedly pledged (i) one hundred percent (100%) of the equity of Barnett Shale Operating LLC, Cowtown Pipeline Funding, Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., Cowtown Pipeline Management, Inc., QPP Holdings LLC, QPP Parent LLC, and Silver Stream Pipeline Company LLC; and (ii) sixty five percent (65%) of (a) the equity of Quicksilver Resources Canada, Inc. and (b) the interest in Quicksilver Production Partners Operating Ltd. (collectively, the Pledged Interests ) to secure payment of the Second Lien Obligations. 29. On June 21, 2013, Quicksilver entered into that certain Mortgage, Deed of Trust, Assignment of As-Extracted Collateral, Security Agreement, Fixture Filing and Financing Statement (collectively, as filed or recorded in the appropriate office of recorder of deeds for the applicable jurisdiction in which the subject real property is located, the Mortgages ). 30. Pursuant to the Mortgages, Quicksilver purportedly granted the Second Lien Collateral Agent liens on and security interests in certain collateral to secure payment of the Second Lien Obligations. Specifically, Quicksilver purportedly granted the Second Lien Collateral Agent liens on and security interests in certain property included within the definition of Collateral. The Mortgages define Collateral as all Mortgaged Property and UCC Collateral. Mortgaged Property means all Oil and Gas Properties and other properties and assets described in section 2.01 of the Mortgages and Oil and Gas Properties primarily consists { W } 11

34 Case LSS Doc Filed 10/29/15 Page 13 of 51 of a portion of Quicksilver s proved oil and gas properties and certain related assets. UCC Collateral, on the other hand, means the property and other assets described in section 2.02 [of the Mortgages], including the Personal Property. Mortgages at Thus, the Debtors did not provide blanket or all assets liens or security interests, and only assets consisting of the Mortgaged Property, UCC Collateral and Pledged Interests (together, the Second Lien Collateral ) are included in the collateral granted to the Second Lien Collateral Agent. Filing the Mortgages and UCC-1 Financing Statements 31. Upon information and belief, in an attempt to perfect liens on and security interests in certain real property included in the Second Lien Collateral, the Mortgages were filed, along with an exhibit describing specific Hydrocarbon Interests included as collateral, in Denton County, Hill County, Hood County, Johnson County, Parker County, Somervell County and Tarrant County, Texas. As a result, the Second Lien Collateral Agent has asserted that it has perfected liens on and security interests in: (i) the Hydrocarbon Interests (as defined in the Mortgages) described correctly on Exhibit A to the filed Mortgages; (ii) Hydrocarbon Interests (a) located in Denton County, Hill County, Hood County, Johnson County, Parker County, Somervell County or Tarrant County, Texas, and (b) listed on a unit designation that includes encumbered Hydrocarbon Interests described in subsection (i) above; and (iii) other Oil and Gas Properties (as defined in the Mortgages) situated upon, used, held for use or useful in connection with the operating, working or development of any of the Hydrocarbon Interests (excluding drilling rigs, automotive equipment, rental equipment or other personal property which may be on such premises for the purpose of drilling a well or for other similar temporary uses and surface buildings, structures and the contents thereof) described in subsections (i) or (ii) above (collectively, the Perfected Mortgaged Property ). { W } 12

35 Case LSS Doc Filed 10/29/15 Page 14 of Upon information and belief, to perfect liens on and security interests in certain personal property included within Second Lien Collateral, the Second Lien Collateral Agent caused UCC-1 financing statements to be filed in the Secretary of States offices in the respective states where the Debtors are located. The UCC-1 financing statements each describe either the Pledged Interests or the personal property pledged as collateral in the Mortgages. The Unencumbered Property 33. All of the Debtors property that is not Second Lien Collateral (the Unencumbered Property ) is not subject to the Second Lien Collateral Agent s liens or security interests. 34. Upon information and belief, the Unencumbered Property includes, without limitation: (i) one hundred percent (100%) of the equity of Cowtown Drilling Inc., Makarios Resources International Inc., Makarios Resources International Holdings LLC, Quicksilver Production Partners GP LLC and Quicksilver Production Partners LP, and thirty-five percent (35%) of the equity of Quicksilver Resources Canada, Inc. and the interest in Quicksilver Production Partners Operating Ltd. (collectively, the Unencumbered Equity ); (ii) all investment accounts (the Unencumbered Investment Accounts ); 6 (iii) all tax refunds, including but not limited to the fiscal year 2014 federal tax refund (the Unencumbered Tax Refund ); (iv) all automobiles, trucks and other vehicles (the Unencumbered Vehicles ); (v) leasehold improvements described by the Debtors as the Burnett Plaza Office Design and Work (the Unencumbered Leasehold Improvements ); (vi) all prepaid insurance premiums (the Unencumbered Insurance Premiums ); (vii) all notes receivable, including without limitation, 6 The Unencumbered Investment Accounts include all investment accounts (including cash deposits therein), including without limitation, the following accounts: (i) Bank of Texas, Account No. (Last Four) 8126, Value as of Petition Date = $61,957,817.36; (ii) Plains Capital Bank, Account No. (Last Four) 4031, Value as of Petition Date = $45,907,337.00; and (iii) Texas Capital Bank, Account No. (Last Four) 5974, Value as of Petition Date = $59,526, { W } 13

36 Case LSS Doc Filed 10/29/15 Page 15 of 51 the notes receivable from Quicksilver Resources Canada Inc., Dalmac Holdings Inc. and Ristorante La Piazza Patron (the Unencumbered Notes ); (viii) all commercial tort claims (the Unencumbered Commercial Tort Claims ); (ix) all cash, except to the extent such cash constitutes the proceeds of the Second Lien Collateral (the Unencumbered Cash ); 7 (x) all accounts receivable and contract rights, except to the extent such accounts receivable and contract rights are derived from or specifically pertain to Second Lien Collateral (the Unencumbered Accounts Receivable ); (xi) all computer software, except to the extent such computer software pertains to Second Lien Collateral (the Unencumbered Software ); (xii) all surface lands and surface rights not included within the definition of Perfected Mortgaged Property (the Unencumbered Surface Interests ); and (xiii) all of the Debtors rights, titles, interests and estates and the lands and premises covered or affected thereby in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, fee interests, surface interests, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature, in each case, which are not included in the Perfected Mortgaged Property described above (collectively, the Unencumbered Hydrocarbon Interests ). 8 7 Unencumbered Cash includes all cash on hand and any cash deposited in the following accounts: (i) Bank of America, N.A., Account No. (Last Four) 1558; (ii) Bank of Texas, Account No. (Last Four) 3215; (iii) Bank of Texas, Account No. (Last Four) 3237; (iv) Bank of Texas, Account No. (Last Four) 3226; (v) Bank of Texas, Account No. (Last Four) 3248; (vi) BB&T Securities, LLC, Account No. (Last Four) 7698; (vii) BBVA Compass, Account No. (Last Four) 8438; (viii) Comerica, Account No. (Last Four) 8024; (ix) JPMorgan Chase, Account No. (Last Four) 7899; (x) JPMorgan Chase, Account No. (Last Four) 7907; (xi) JPMorgan Chase, Account No. (Last Four) 9729; (xii) JPMorgan Chase, Account No. (Last Four) 7881; (xiii) JPMorgan Chase, Account No. (Last Four) 1590; (xiv) JPMorgan Chase, Account No. (Last Four) 9997; (xv) JPMorgan Chase, Account No. (Last Four) 9270; (xvi) Merrill, Lynch, Pierce, Fenner & Smith Inc., Account No. (Last Four) 1EJE; (xvii) RBS, Account No. (Last Four) 0371; (xviii) Regions Financial Bank, Account No. (Last Four) 8318; (xix) US Bank, National Association, Account No. (Last Four) 0050; and (xx) Wells Fargo Securities, LLC, Account No. (Last Four) Unencumbered Hydrocarbon Interests also includes (a) all unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any governmental authority) which may affect all or any portion of the Unencumbered Hydrocarbon Interests, (b) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Unencumbered Hydrocarbon Interests or the production, sale, purchase, { W } 14

37 Case LSS Doc Filed 10/29/15 Page 16 of The Second Lien Collateral Agent did not obtain a perfected lien on or security interest in the Unencumbered Hydrocarbon Interests, including, without limitation: (a) the leases and property interests identified on Exhibit A hereto because the Second Lien Collateral Agent has not recorded a Mortgage in respect of the Unencumbered Hydrocarbon Interests in the applicable office of the recorder of deeds for the jurisdiction in which a given property is located; and (b) the leases and property interest identified on Exhibit B hereto because such leases or property interests are not correctly described in the Mortgages. Additionally, the Second Lien Collateral Agent did not obtain perfected liens on or security interests in the Unencumbered Surface Interests, including, without limitation, the leases and property interests identified on Exhibit C hereto because the Second Lien Collateral Agent has not recorded a Mortgage in respect of the Unencumbered Surface Interests. 36. Upon information and belief, the Debtors will have funded the continuing operation of their businesses during the period from the Petition Date until December 31, 2015 with more than $15 million in funds that are Unencumbered Property, and by operating the businesses the Debtors preserved and maintained the Second Lien Collateral since ceasing operations would have resulted in shut in of wells, which in turn would have led to a reduction in the value of the Second Lien Collateral, by, inter alia, water encroachment or seepage into the reserves, loss of any lease where continuous operation was a requirement under the lease, and transportation, exchange or processing of hydrocarbons from or attributable to such Unencumbered Hydrocarbon Interests, (c) all hydrocarbons in and under and which may be produced and saved or attributable to the Unencumbered Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Unencumbered Hydrocarbon Interests, (d) all tenements, hereditaments, appurtenances and properties in any manner appertaining, belonging, affixed or incidental to the Unencumbered Hydrocarbon Interests, and (e) all properties, rights, titles, interests and estates described or referred to above, including any and all property, real or personal situated upon, used, held for use or useful in connection with the operating, working or development of any such Unencumbered Hydrocarbon Interests or property, including, any and all oil wells, gas wells, injection wells or other wells, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes, together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. { W } 15

38 Case LSS Doc Filed 10/29/15 Page 17 of 51 expenditures to shut in wells. Upon further information and belief, the Second Lien Collateral has not diminished in value as a result of: (i) the Debtors post-petition use of such property; or (ii) the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code. CLAIMS FOR RELIEF COUNT I DECLARATORY JUDGMENT THAT UNENCUMBERED EQUITY IS NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 38. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Pledged Interests pursuant to the Second Lien Pledge Agreement. The Pledged Interests do not include the Unencumbered Equity. 39. Accordingly, under the Second Lien Pledge Agreement, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Equity. 40. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Equity. The Unencumbered Equity was not included in the Debtors grant of liens on and security interests in the Second Lien Pledge Agreement, and there have been no subsequent grants of liens on or security interests in the Unencumbered Equity. 41. An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s asserted liens on and security interests in the Unencumbered Equity. 42. Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in any Unencumbered Equity. { W } 16

39 Case LSS Doc Filed 10/29/15 Page 18 of 51 COUNT II DECLARATORY JUDGMENT THAT UNENCUMBERED INVESTMENT ACCOUNTS ARE NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 44. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Investment Accounts. The grant of liens on and security interests in the Oil and Gas Properties in the Mortgages specifically states that Oil and Gas Properties shall not include cash, deposit accounts or securities accounts. The limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Investment Accounts. 45. Under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Investment Accounts. 46. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Investment Accounts. The Unencumbered Investment Accounts were not included in Quicksilver s grant of liens and security interests in the Mortgages, and there have been no subsequent grants of liens on or security interests in the Unencumbered Investment Accounts. 47. An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Investment Accounts. { W } 17

40 Case LSS Doc Filed 10/29/15 Page 19 of Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in any Unencumbered Investment Accounts. COUNT III DECLARATORY JUDGMENT THAT UNENCUMBERED TAX REFUND IS NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 50. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Tax Refund in that the limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Tax Refund. 51. Accordingly, under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Tax Refund. 52. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Tax Refund. The Unencumbered Tax Refund was not included in Quicksilver s grant of liens and security interests in the Mortgages, and there have been no subsequent grants of liens on or security interests in the Unencumbered Tax Refund. 53. An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Tax Refund. { W } 18

41 Case LSS Doc Filed 10/29/15 Page 20 of Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in the Unencumbered Tax Refund. COUNT IV DECLARATORY JUDGMENT THAT UNENCUMBERED VEHICLES ARE NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 56. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Vehicles in that the limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Vehicles. Additionally, the Mortgages specifically exclude Excluded Collateral (as defined in the Mortgages) from the Second Lien Collateral, and under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Excluded Collateral. 57. The Mortgages define Excluded Collateral to include the Unencumbered Vehicles. Specifically, the Mortgages define Excluded Collateral to include any vehicles, or any equipment the ownership of which is evidenced by certificate(s) of title[.] 58. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Vehicles because the Unencumbered Vehicles are expressly excluded from the property on which liens or security interests are granted in the Mortgages, and there have been no subsequent grants of liens on or security interests in the Unencumbered Vehicles. { W } 19

42 Case LSS Doc Filed 10/29/15 Page 21 of An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Vehicles. 60. Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in any Unencumbered Vehicles. COUNT V DECLARATORY JUDGMENT THAT UNENCUMBERED LEASEHOLD IMPROVEMENTS ARE NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 62. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The Debtors granted liens on real property in the Mortgages by listing the real property subject to the Second Lien Collateral Agent s liens on Exhibit A to the applicable Mortgage. The Unencumbered Leasehold Improvements are not listed on the Exhibit to any of the Mortgages. 63. Accordingly, under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Leasehold Improvements. 64. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Leasehold Improvements. The Unencumbered Leasehold Improvements were not included in Quicksilver s grant of liens and security interests in the Mortgages, and there have been no subsequent grants of liens on or security interests in the Unencumbered Leasehold Improvements. { W } 20

43 Case LSS Doc Filed 10/29/15 Page 22 of An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Leasehold Improvements. 66. Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in the Unencumbered Leasehold Improvements. COUNT VI DECLARATORY JUDGMENT THAT UNENCUMBERED INSURANCE PREMIUMS ARE NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 68. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Insurance Premiums in that the limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Insurance Premiums. 69. Accordingly, under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Insurance Premiums. 70. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Insurance Premiums. The Unencumbered Insurance Premiums were not included in Quicksilver s grant of liens and security interests in the Mortgages, and there have been no subsequent grants of liens on or security interests in the Unencumbered Insurance Premiums. { W } 21

44 Case LSS Doc Filed 10/29/15 Page 23 of An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Insurance Premiums. 72. Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in the Unencumbered Insurance Premiums. COUNT VII DECLARATORY JUDGMENT THAT UNENCUMBERED NOTES ARE NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 74. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Notes in that the limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Notes. 75. Accordingly, under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Notes. 76. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Notes. The Unencumbered Notes were not included in Quicksilver s grant of liens and security interests in the Mortgages, and there have been no subsequent grants of liens on or security interests in the Unencumbered Notes. { W } 22

45 Case LSS Doc Filed 10/29/15 Page 24 of An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Notes. 78. Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in the Unencumbered Notes. COUNT VIII DECLARATORY JUDGMENT THAT UNENCUMBERED COMMERCIAL TORT CLAIMS ARE NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 80. To the extent that the Debtors possess any commercial tort claims, they are Unencumbered Commercial Tort Claims. 81. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Commercial Tort Claims in that the limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Commercial Tort Claims. 82. Accordingly, under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Commercial Tort Claims. 83. The Second Lien Collateral Agent does not have liens on or security interests in the Unencumbered Commercial Tort Claims. The Unencumbered Commercial Tort Claims were not included in Quicksilver s grant of liens and security interests in the Mortgages, and there { W } 23

46 Case LSS Doc Filed 10/29/15 Page 25 of 51 have been no subsequent grants of liens on or security interests in the Unencumbered Commercial Tort Claims. 84. An actual, substantial, and justiciable controversy exists between the Committee and the Second Lien Collateral Agent concerning the extent of the Second Lien Collateral Agent s liens on and security interests in the Unencumbered Commercial Tort Claims. 85. Accordingly, the Committee is entitled to a judgment declaring that the Second Lien Collateral Agent does not have a lien on or security interest in the Unencumbered Commercial Tort Claims. COUNT IX DECLARATORY JUDGMENT THAT UNENCUMBERED CASH IS NOT SUBJECT TO THE SECOND LIEN COLLATERAL AGENT S LIENS AND SECURITY INTERESTS PURSUANT TO 28 U.S.C AND The Committee repeats and realleges each of the preceding paragraphs as if fully set forth herein. 87. The Debtors granted the Second Lien Collateral Agent liens on or security interests in the Second Lien Collateral pursuant to the Mortgages. The grant of liens and security interests in the Mortgages did not include a grant of liens on or security interests in the Unencumbered Cash. In fact, the grant of liens on and security interests in the Oil and Gas Properties in the Mortgages specifically states that Oil and Gas Properties shall not include cash, deposit accounts or securities accounts. Moreover, the limited grant of security interests in section 2.02 of the Mortgages does not include the grant of a security interest in the Unencumbered Cash. 88. Accordingly, under the Mortgages, none of the Debtors granted the Second Lien Collateral Agent any liens on or security interests in the Unencumbered Cash. { W } 24