Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Energy

Escalera Resources Chapter 11 Petition Filed

Escalera Resources filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Colorado, case number 15-22395. The Company, which explores, develops, produces and sells natural gas and crude oil, is represented by Michael J. Guyerson of Onsager Guyerson Fletcher Johnson. According to documents filed with the Court, Escalera Resources and lender Societe Generale have agreed to a term sheet outlining the substantive terms of a plan of reorganization (which has not yet been filed with the Court). Under the term sheet, administrative claims and priority non-tax claims shall be paid in full in cash as soon as practicable after the plan effective date. Mineral lien claimants holding secured mechanic or materialmen liens senior to the liens under the credit facility shall be paid in cash or otherwise left unimpaired. The lender will receive a new secured note in the principal amount of $15 million (which may be increased to $17 million under certain circumstances), as well as a deficiency claim of approximately $21.9 million, which deficiency claim will be entitled to share pro rata in a new second lien payment-in-kind (PIK) note. General unsecured claimants other than Societe Generale shall have the option to share in the PIK note, share in a cash distribution, or share in up to 49% of new common equity of the reorganized Debtor. The remaining 51% of new common equity will be retained by the reorganized Debtor for distribution under a management incentive plan. Existing equity as of the petition date will be extinguished. According to a corporate release, "The Company believes the Chapter 11 process will provide the greatest flexibility to pursue viable options for asset sales or other alternatives with the goal of maximizing the value of the Company."

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