Paragon Offshore announced that the U.S. Bankruptcy Court issued an oral ruling denying confirmation of its Modified Second Amended Joint Chapter 11 Plan of Reorganization. Although a written ruling is expected to be issued, a formal docket entry has not yet been issued.
According to the corporate release, “In issuing his oral ruling, Judge Christopher Sontchi commented that the Plan is not feasible as it removes too much cash from the company during the current downturn. However, he noted that his ruling did not preclude the company from a restructuring, only that the company could not do so under the current Plan.” Paragon Offshore notes, “Paragon is evaluating its course of action but cannot comment on details of the next steps the company will take.”
As previously reported, the Plan, filed August 15, 2016, argued, “The Debtors disagree with the Secured Term Loan Agent’s arguments and believe that the Modified Plan satisfies all requirements under section 1129 of the Bankruptcy Code. Moreover, Holders of 100% in outstanding principal amount of the Revolving Credit Agreement Claims and holders of approximately 68.98% in outstanding principal amount of the Senior Notes Claims entitled to vote on the Modified Plan have already agreed to support the Modified Plan by submitting a ballot to accept, or forgoing the opportunity to submit a Ballot to reject, the Modified Plan.”
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