Forbes Energy Services and four affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 17-20023.
The Company, which provides a wide range of well site services to oil and natural gas drilling and producing companies, is represented by Kenneth Green of Snow Spence Green. Concurrent with the petition, the Company also filed a Prepackaged Joint Plan of Reorganization and related Disclosure Statement (dated December 21, 2016).
The Disclosure Statement notes, “As of the date hereof, the Debtors had outstanding debt having a principal amount of over $300 million. Upon emergence from chapter 11, the Reorganized Debtors expect to have outstanding debt primarily consisting of obligations under a contemplated $50 million term loan Exit Facility. Accordingly, the Reorganized Debtors will have a significantly deleveraged and improved balance sheet and a more appropriate capital structure. Pursuant to the Restructuring Support Agreement, …the Debtors have obtained the agreement of Holders of approximately 65.40% in principal amount of the Senior Unsecured Notes to vote in support of the Plan.”
The Disclosure Statement continues, “The Senior Unsecured Notes represent $280 million in principal obligations owed by the Debtors, plus projected accrued interest of approximately $32 million as of January 23, 2017. Under the Plan, the Senior Unsecured Notes will be exchanged for $20 million in cash and 100% of the New Common Stock in Reorganized Parent, subject to dilution on account of shares issued or available for issuance under the Management Incentive Plan. Allowed Secured Claims either will be reinstated or paid in full under the Plan. Holders of General Unsecured Claims also will receive payment in full and are unimpaired under the Plan. Equity Interests in FES Ltd., inclusive of the Existing Preferred Stock, will be extinguished.”
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