This is all from the Form 8-K on 3-Jun-2016
The Restructuring Support Agreement includes an agreed timeline for the Chapter 11 Cases that, if met, would result in the Company confirming a Chapter 11 plan and emerging from bankruptcy within 130 days. The proposed terms of the DIP Credit Agreement and the proposed terms of the restructuring set forth in the Restructuring Support Agreement are to be effectuated through the Chapter 11 Cases and remain subject to Bankruptcy Court approval.
Item 1.03 Bankruptcy or Receivership.
On June 2, 2016, Warren Resources, Inc. (the "Company") and certain of its wholly owned subsidiaries (together with the Company, the "Debtors") filed voluntary petitions (the "Bankruptcy Petitions") for reorganization under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). The Debtors have filed a motion with the Bankruptcy Court seeking to jointly administer all of the Debtors' Chapter 11 cases (the "Chapter 11 Cases") under the caption In re Warren Resources, Inc., et al., Case No. 16-32760. The Debtors will continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company has filed a series of first day motions with the Court that will allow it to continue to conduct business without interruption. These motions are designed primarily to minimize the effect of bankruptcy on the Company's operations, customers and employees.
The Company expects to continue operations in the normal course during the pendency of the Chapter 11 Cases, and anticipates making royalty payments and payments to working interest owners when due, subject to Bankruptcy Court approval. Employees should expect no change in their daily responsibilities and to be paid in the ordinary course of business.
Restructuring Support Agreement
In connection with its Chapter 11 filing, the Company announced today that it has reached an agreement (the "Restructuring Support Agreement"), executed on June 2, 2016, with the lenders under its existing first-lien credit agreement (the "Plan Sponsor") and the holders of a majority of its senior notes for a consensual restructuring of its balance sheet. Under the Restructuring Support Agreement:
? the lenders under the Company's first-lien credit agreement will become lenders under a new first-lien credit facility and will obtain 82.5% of the post-restructuring common equity of the Company (subject to dilution under a new management incentive program and the exercise of certain warrants, to the extent issued, as described in the bullet below);
? the lenders under the Company's second-lien credit facility, the holders of the Company's unsecured notes and, at the option of the Plan Sponsor, a holder of another claim (if allowed) will be entitled to share pro rata in 17.5% of the post-restructuring common equity of the Company; and
? the reorganized Company may, subject to the satisfaction of certain conditions, issue to the lenders under the Company's second-lien credit facility five-year warrants exercisable into up to 5% of the post-restructuring common equity of the Company (subject to dilution under a new management incentive plan).
The Restructuring Support Agreement contemplates the approval by the Bankruptcy Court of the DIP Credit Agreement described below under "-Debtor-in-Possession Financing." Upon the effectiveness of the plan of reorganization contemplated by the Restructuring Support Agreement, any outstanding principal amount of the DIP Credit Agreement may be, at the option of the Plan Sponsor, exchanged or rolled into the new first-lien credit facility.
The Restructuring Support Agreement includes an agreed timeline for the Chapter 11 Cases that, if met, would result in the Company confirming a Chapter 11 plan and emerging from bankruptcy within 130 days. The proposed terms of the DIP Credit Agreement and the proposed terms of the restructuring set forth in the Restructuring Support Agreement are to be effectuated through the Chapter 11 Cases and remain subject to Bankruptcy Court approval.
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