Bankruptcy News

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Bankruptcy/Chapter 11 / Bonds / Energy

Milagro Oil & Gas Plan Filed

Milagro Oil & Gas filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan effects the transactions contemplated by the Contribution Agreement and Restructuring Support Agreement, including the discharge of Claims and Interests, primarily, through the: (a) effectuation of the Contribution Agreement Transaction...(b) payment of the Cash Payment by White Oak, which will be used, along with cash on hand and the Rights Offering Proceeds (as necessary), to satisfy the Senior Debt Claims, Allowed Administrative Claims (including DIP Claims), Allowed Priority Tax Claims, Allowed Professional Fee Claims, Allowed Other Priority Claims, and Allowed Other Secured Claims; (c) receipt of the Milagro Interests from White Oak by the Reorganized Debtor; (d) issuance of 100% of the Reorganized Debtor Common Stock (which is to be immediately converted to New Holdings Units in the Reorganized Debtor upon its conversion to a limited liability company as set forth in the Plan), subject to dilution from any Rights Interests or Reorganized Debtor Common Stock in respect of the Rights Offering or the Backstop Commitment Fee to the Holders of the Notes Claims in Class 4; (e) implementation of the Rights Offering, which shall include issuing the remaining shares of Reorganized Debtor Common Stock (which is to be immediately converted to New Holdings Units in the Reorganized Debtor upon its conversion to a limited liability company as set forth in the Plan) to the Holders of Notes Claims that are Eligible Participants and participate in the Rights Offering and certain of the Initial Consenting Noteholders (in their capacity as Backstop Parties); and (f) delivery of the Cash-Out Payment to the Holders of Notes Claims that are Non-Eligible Investors. Following the Effective Date, the Reorganized Debtor will be the owner of the Milagro Interests, which are equity interests in White Oak that, as of the date hereof, are expected to be approximately 37.5% of the outstanding interests in White Oak, but which are subject to final determination in accordance with the terms of the Contribution Agreement. Holders of Allowed General Unsecured Claims are impaired under the Plan, and are not entitled to any distribution on account of their Claims….All Equity Interests in the Debtors will be cancelled and the Holders of Equity Interests are not entitled to receive any distribution under the Plan. Holders of Allowed Administrative Claims (including DIP Claims), Allowed Priority Tax Claims, Allowed Professional Fee Claims, Allowed Other Priority Claims, and Allowed Other Secured Claims will be paid in full in Cash."

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