Magnum Hunter Resources Committee Sought


According to the U.S. Bankruptcy Court docket, Magnum Hunter Resources’ ad hoc group of equity security holders filed a motion for the appointment of an official committee of equity security holders.

The motion explains, “These Debtors are not ‘hopelessly insolvent.’…As described in greater detail in Brown Rudnick’s January 11, 2016 letter, a valuation of the Debtors shows that the Debtors may be solvent by between approximately $200 million and $400 million, based on publicly-available information and conservative assumptions….Finally, it should be eminently clear to the Court at this juncture that absent the appointment of an official committee, the interests of equity holders will not adequately be represented in these cases.”

The motion continues, “The Debtors’ capital structure is complex, consisting of approximately $1 billion in debt, including a $200 million DIP facility, $336.6 million outstanding under a Second Lien Credit Agreement; and $600 million in 9.75% Senior Unsecured Notes. On top of this indebtedness, the Debtors have three series of Preferred Stock outstanding, in addition to the outstanding common stock….The Ad Hoc Group has one ultimate goal: to discover the true value of the Debtors’ estates, so that this value may be distributed equitably to all stakeholders. If an official committee is appointed, there is no reason to believe that this would change.”

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