Advertisement

PostRock Energy Compromise Approved

Advertisement

The U.S. Bankruptcy Court issued an order approving PostRock Energy’s Chapter 11 trustee’s motion to compromise a controversy with Citibank.

As previously reported, “By this Motion the Trustee respectfully requests that this Court approve the following settlement between Trustee and Defendants: (a) Defendants shall have a valid and perfected lien on ninety-one percent (91%) of the value of the West Virginia Assets (the ‘Liened Proceeds’) and (b) Trustee shall move for immediate payment of the West Virginia Proceeds, less senior liens and agreed sales costs as set forth in the Sale Motion, Bid Procedures Order and Sale Order, to Defendants.”

In addition, “Based on this analysis Trustee believes Defendants’ have a lien on 91% of the value of the West Virginia Assets. Therefore, the Settlement results in a ‘best case’ for the estate without incurring any litigation costs. Any recovery for the estate would be fully recoverable from the West Virginia Proceeds. There would be a significant cost to the estate if this matter had to be resolved by summary judgment or trial. This expense is eliminated by the Settlement.”

Read more energy bankruptcy news.