Breitburn Energy Partners LP, which has been in bankruptcy since 2016, does not plan to pursue an unsolicited $1.8 billion cash offer from Lime Rock Resources, according to court filings.

The offer from Houston-based Lime Rock, which invests in oil and gas properties, surfaced last month as Breitburn was awaiting a ruling on its bankruptcy reorganization plan. The confirmation hearing ended in January after a bitter valuation battle between Breitburn and its shareholders who argued it undervalued the company.

In a filing with U.S. bankruptcy court in Manhattan late Feb. 9, Breitburn said it was not required to "pursue conditional offers thrown across the transom, particularly after the close of a contested confirmation hearing."

Lime Rock’s $1.8 billion “stalking horse” offer tops a $1.6 billion enterprise valuation by Breitburn’s investment bank.

Breitburn's shareholders say Breitburn is worth $3.8 billion following a spike in oil prices since the company filed for bankruptcy in 2016. They argued in court that Breitburn had low-balled its valuation in order to favor creditors who stood to gain control over its assets.

Breitburn equity holders want the Lime Rock bid to be entered into the record of the bankruptcy case, a move they believe would sway the court to reject the reorganization for undervaluing the company.

On Feb. 9, Lime Rock extended a deadline for its proposal until Feb. 14, a day after a hearing for Bernstein to decide on Breitburn equity holders' request.

Breitburn said Lime Rock's offer confirms its valuation and would still leave equity holders "woefully underwater" by more than $1.25 billion.

Breitburn is organized as a master limited partnership, and equity holders could be stuck with a hefty tax bill unless the company has a higher valuation.

Lime Rock said in its Jan. 31 offer letter that it would bid patiently and aggressively for Breitburn, which owns prized oil reserves in the Permian Basin in Texas as well as California, the Rocky Mountains, the U.S. Midwest and Southeast.

If the Lime Rock offer advances, it would open up a bankruptcy auction and could spoil an attempt by a group of unsecured creditors led by Elliott Management Corp. and WL Ross & Co. to scoop up Breitburn's assets through a $775 million rights offering.

Elliott last year gained a sizeable stake in the largest U.S. coal miner Peabody Energy Corp. through a similar rights offering.

It is now Peabody's largest shareholder with 33.82%, according to Thomson Reuters data.