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 / Bonds

Penn Virginia Chapter 11 Petition, Plan Filed

Penn Virginia and eight affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Eastern District of Virginia, lead case number 16-32395. The Company, which is engaged in the onshore exploration, development and production of oil, natural gas liquids and natural gas, is represented by Michael A. Condyles of Kutak Rock. Penn Virginia entered into a restructuring support agreement with holders of 87% (or $1.03 billion) of its nearly $1.2 billion in total funded-debt obligations. Subject to Court approval, the Company has received a commitment for $25 million in debtor-in-possession financing from its RBL lenders, which combined with the Company's cash reserves and cash from operations, is expected to provide liquidity throughout the Chapter 11 process. Additionally, the Company has obtained a commitment for up to $128 million in exit financing from its RBL lenders, led by Wells Fargo as agent, as well as a $50 million rights offering that is backstopped and supported by certain of the Company's senior unsecured noteholders. Edward B. Cloues, II, chairman and interim C.E.O. of Penn Virginia, comments, "Like many other exploration and production companies, Penn Virginia has been significantly affected by the recent and continued dramatic decline in oil and natural gas prices." Concurrent with its Chapter 11 petition, the Company filed a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "On the Effective Date, the Debtors shall consummate the $50 million Rights Offering pursuant to the Backstop Commitment Agreement and in accordance with the Rights Offering Procedures. Under the terms of the Backstop Commitment Agreement, in addition to agreeing to fully exercise all Subscription Rights issued to them pursuant to the Plan, the Backstop Parties have agreed to purchase all unsubscribed shares under the Rights Offering, at a per share purchase price that reflects a discount of 25% to the total settled plan equity value of $125 million. Additionally, under the terms of the Backstop Commitment Agreement, the Backstop Parties shall receive a premium in an amount equal to $3,000,000 (which represents 6% of the $50 million aggregate Rights Offering amount, the Commitment Premium)." The Court scheduled an August 4, 2016 confirmation hearing, with objections due by July 25, 2016.

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