Bonanza Creek Energy’s ad hoc committee of equity security holders filed with the U.S. Bankruptcy Court an emergency motion for an order adjourning the combined hearing to consider both the Disclosure Statement and First Amended Joint Prepackaged Plan of Reorganization.
The motion explains, “These cases are at a critical crossroads. Does this Court allow for an independent trustee or statutorily required examiner to investigate the incredibly suspect facts and circumstances behind an intentionally manufactured low valuation set forth in the Prepackaged Plan or does it allow management and the Ad Hoc Noteholders’ Committee to unjustifiably use the bankruptcy process to enrich themselves at the expense of legacy equity? Based on discovery undertaken to date, the Ad Hoc Equity Committee has concluded that the Debtors’ management have manipulated their business plan to support an artificially low valuation and agreed to support such a valuation advocated by the Ad Hoc Noteholders’ Committee in exchange for a management incentive plan (the ‘MIP’) worth tens of millions of dollars struck off that artificially low valuation.”
In addition, “Perhaps even more disturbing, the Debtors have unilaterally violated (a) the scheduling order by delivering their rebuttal expert report a full day late and (b) discovery related agreements between the parties by withholding critical drilling cost diligence for nearly a month and only delivering such information after expert reports were exchanged and by refusing to provide the contact log PWP…allegedly maintained in connection with its solicitation of third party interest in financing or acquiring the Debtors.”
The ad hoc committee also sought Court approval to file under seal certain portions of this emergency motion.
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