Endeavour International Corp (ENDRQ)

[mistracer]

DJ Bankruptcy Judge Approves Endeavour Debt-for-Equity Swap

Oct 16, 2015 15:31:00 (ET)


By Patrick Fitzgerald

Endeavour International Corp. Friday won approval of debt-for-equity swap with bondholders, the latest company to use a so-called structured dismissal to end its stalled bankruptcy case.

Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Del., signed off on the oil and gas company's proposal to hand control of its U.K. assets---which make up more than 90% of its business---to a group of senior bondholders and wrap up its affairs outside of chapter 11.

Instead of ending its bankruptcy case with a chapter 11 plan that follows specific rules for debt repayment prescribed by Congress, Endeavour and its senior creditors have agreed to set aside money and settle their differences outside the bankruptcy courtroom.

The judge, who noted that he had spent the past few days on bankruptcy cases involving varying degrees of "pain allocation," said the structured dismissal was Endeavour's best chance to exit bankruptcy in an organized manner. But he sounded less than thrilled the company was doing so outside the chapter 11 process.

"If it weren't for the fact that the sun is shining, I'd be really depressed," said Judge Carey.

The approved deal had the backing of Endeavour's unsecured creditors, who initially objected to the proposal, claiming it was skewed to benefit Endeavour's foreign affiliates and a handful of top-ranking creditors at their expense.

The so-called structured dismissal has become an increasingly common tactic, after a federal appeals court ruling in the case of a New Jersey trucking company this spring opened the door to such creative endings for stalled chapter 11 proceedings.

Endeavour filed for bankruptcy a year ago with a prenegotiated plan that was supposed to ensure a quick trip through chapter 11. The plan proposed to cut $568 million in debt from its balance sheet and free up about $50 million in annual cash flow.

But restructuring efforts were thwarted by plunging oil prices, and the company instead placed its assets on the auction block. The price of Brent crude oil has fallen to below $50 a barrel, down from $90 when the restructuring deal was first negotiated.

Endeavour was forced to sell off its oil-and-gas assets in the U.S. and U.K. and will dissolve its business. In addition to bringing the chapter 11 case to a close, the settlement also allow Endeavour to escape from the threat of litigation from creditors over financing deals made just before the company filed for bankruptcy.

-Tom Corrigan contributed to this article

Write to Patrick Fitzgerald at [e-mail]



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(END) Dow Jones Newswires

October 16, 2015 15:31 ET (19:31 GMT)