The U.S. Bankruptcy Court approved Wampanoag Capital’s emergency motion seeking the appointment of an official committee of equity security holders to the Azure Midstream Partners case.
As previously reported, Wampanoag Capital’s motion had argued, “It is critical that an Equity Committee be appointed before the disclosure statement is approved which denies us a vote and then any remaining rights in this case if the plan is confirmed….This is a business that continues to generate cash even after paying these typical operating liabilities, as it has done historically, based on the latest operating report. The Debtors are rejecting only nominal contracts and have resolved their gas gathering agreement matter with BP America Production Company. There are $0 in cure costs for assumed contracts….The Liquidation Analysis is severely flawed because its assumptions are now obsolete, it appears to overstate claims and undervalue assets, and it does not address the phantom Cancellation of Debt Income (CODI) which Unitholders will face if their value is not safeguarded.”
In addition, “They have not explained why the Severance Motion goes above and beyond the Debtors’ contractual obligations to pay unidentified employees inflated severance payments, some of which may be over the statutory $12,850 cap….The Debtors have been unable or unwilling to provide a bridge between the current cash balance and auction proceeds and the projected cash balance on the liquidation date….Our biggest worry is that the over $10mm discrepancy is just going to go to paying the professional fees.”
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