Samson Oil & Gas Ltd. ADR (fka SSNYY)

[56Chevy]

Samson Outlines Revised Chapter 11 Exit Plan

Date : 08/29/2016 @ 11:00AM
Source : Dow Jones News

Samson Resources Corp. has signed a revised restructuring pact with a group of creditors that calls for the oil-and-gas company to exit bankruptcy with its top-ranking loan paid off and equity in the hands of second-lien lenders.

Tulsa, Okla.-based Samson is battling junior creditors in bankruptcy court and must either defeat them or win them over in order to make the restructuring proposal a reality.

The agreement signed Friday pledges investors holding 39% of Samson's second-lien loan claims to support a new chapter 11 plan that should be filed within days.

When it filed for bankruptcy protection in September 2015, Samson was weighted down with about $4.9 billion worth of debt. It had a deal in hand, but falling energy prices continued to chop into the value of Samson's assets and the pact fell apart.

Unveiled Friday, the revamped turnaround plan comes as Samson is taking bids on its oil-and-gas assets and fending off challenges from junior creditors.

Proceeds of the asset sales will be used to pay down Samson's top loan, while the rest of the loan will be refinanced, court papers outlining the revamped proposal say. Samson will also tap the value of its commodity hedging contracts to help reduce the loan.

Second-round bids came in recently, but Samson hasn't disclosed the offers, nor did it say which of its holdings have attracted buyers. An onshore oil-and-gas exploration and production company, Samson has interests in Colorado, Louisiana, North Dakota, Oklahoma, Texas and Wyoming.

If the revamped turnaround strategy plays out as proposed, investors in Samson's $1 billion second-lien debt get the company, and a share of a settlement trust to be set up as part of a chapter 11 exit plan, according to an outline of the revamped proposal filed Friday in the U.S. Bankruptcy Court in Wilmington, Del.

The sale process continues, as does the clash with junior creditors, who are owed $2.3 billion and are being threatened with a minimal recovery from Samson's bankruptcy.

According to Samson, the restructuring proposal is the best it can do in a market that has seen only a sputtering recovery. Junior creditors are being offered a share of the settlement trust after second-lien lenders are paid in full.

A lawyer for the official committee of unsecured creditors, which speaks for junior creditors, couldn't immediately be reached Monday to comment on Samson's latest proposal.

However, at a court hearing last week, Christopher Shore, a lawyer for the committee, predicted a new chapter 11 plan was on the way that would deal harshly with the group.

According to Mr. Shore, Samson has persisted in treating creditors on the lower rungs of the bankruptcy recovery ladder "as hostile, out-of-the-money creditors." Creditors left uncompensated in a corporate bankruptcy are called "out-of-the-money creditors."

Over the coming months, Samson will joust with junior creditors in bankruptcy court on a couple of fronts. Junior creditors say they should be able to propose a competing chapter 11 plan, and they want to sue over prebankruptcy dealings that they contend call into question the validity of some senior loans.

Samson and its senior lenders say there is nothing to the suits, and a rival chapter 11 plan would be a waste of time and money.

As part of its restructuring, Samson proposes to hand out broad releases from liability.

Junior creditors have accused Samson of surrendering legal claims that could be worth more than $1 billion, trading them away for nothing.

Source:
http://ih.advfn.com/p.php?pid=nmona&article=72306483

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