Republic to Seek Financing, Settlement Approval -- Week Ahead
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10:47 AM ET 4/15/16 | Dow Jones
By Lillian Rizzo
In the coming week, Republic Airways Holdings Inc. (RJETQ) on Thursday will ask a Manhattan bankruptcy judge for permission to use a hotly contested bankruptcy loan as well as seek approval for a settlement with Delta Air Lines Inc. (DAL).
Thursday's hearing, before Judge Sean Lane, was pushed back by a week after a group of shareholders expected to go empty-handed in the restructuring sought more time to review the airliner's recently struck deal with Delta.
That deal, reached in March, settling a lawsuit and secures a pledge from Delta to provide a $75 million bankruptcy loan to fund Republic's restructuring.
In addition to the shareholders' objection to the loan, the federal government is also objecting. Both objections concern the protections offered to Delta as lender.
Thursday's hearing will also see the judge take up shareholders' request for a louder voice in the chapter 11 case, which Republic is fighting.
The upcoming week will also see oil and gas companies head to court in hopes of having important milestones in their bankruptcy cases approved so they may move one step closer to exiting chapter 11.
On Tuesday, Texas oil and gas company Black Elk Energy Offshore Operations LLC will ask Judge Marvin Isgur of the Houston bankruptcy court to let it put its reorganization plan to a creditor vote.
Black Elk filed the reorganization plan this week, with hopes of a speedy approval from Judge Isgur. The company proposes a timeline that would give creditors until May 23 to cast their ballots and would put the plan itself before the judge on June 8.
Black Elk was pushed into bankruptcy by some of its creditors in August, and since then has dealt with criminal charges in connection with a fatal explosion on a welding platform in the Gulf of Mexico. The lawsuits allege Black Elk didn't follow proper safety precautions and rushed the work, resulting in the deaths of three workers as well as injuries. Court papers show Black Elk has pleaded not guilty to the criminal charges and has asked for them to be dismissed.
On Wednesday, New Gulf Resources LLC will put its reorganization plan before Judge Brendan L. Shannon, of the Wilmington, Del., bankruptcy court, for his approval.
The Tulsa, Okla.-based company filed for chapter 11 in December after reaching a deal with bondholders including Varde Partners Inc., PennantPark Investment Corp. (PNNT), and Millstreet Capital Management LLC on the terms of a restructuring that would erase more than $400 million in debt from New Gulf's books.
Second-lien bondholders, who are owed $365 million in principal, would receive between 85.5% and 95% of the new equity in the restructured company. This group of bondholders will also get the opportunity, along with New Gulf's bankruptcy lenders, to participate in a rights offering of $135.25 million in new first-lien bonds.
Earlier this month, New Gulf and Energy & Exploration Partners Inc. reached a settlement over a drilling partnership that had complicated both bankrupt companies' court proceedings. The settlement has already secured court approval.
Energy & Exploration is scheduled to seek the approval of the Fort Worth, Texas, bankruptcy court for its reorganization plan on Thursday.
--Tom Corrigan contributed to this article.
Write to Lillian Rizzo at lillian.rizzo@wsj.com
> Dow Jones Newswires
April 15, 2016 10:47 ET (14:47 GMT)
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