Advertisement

Breitburn Energy Bankruptcy Objection Filed

Advertisement

Breitburn Energy Partners’ official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ fifth motion for an exclusivity extension.

The objection asserts, “The Debtors have now been in bankruptcy for more than sixteen months and there is still no plan on file. Despite four extensions of the Debtors’ exclusive periods and months of negotiations between the Debtors, unsecured creditors, and to a certain extent the Second Lien Group, there has been no agreement on a plan that clearly maximizes the value of the estate and is supported by each class of creditors…the Rights Offering Plan, which the Debtors now seem to be favoring, and the Debtors’ alternative Permian Sale Plan are premised on a sale of the Debtors’ assets. The former is based on a sale of the Permian Assets – disguised as a ‘rights offering’ – to a select group of Unsecured Noteholders and a sale of the Debtors’ legacy assets to the Second Lien Noteholders.”

In addition, “The Debtor’s alternative plan purportedly would involve a Court-approved sale of the Permian Assets and a restructuring around the legacy assets that principally would benefit the Second Lien Noteholders. Although the Committee believes that a sale of the Debtors’ assets is appropriate given the current circumstances and the amount of time that has passed in these cases, neither of the plans being considered by the Debtors would maximize the value of the assets for unsecured creditors, the fulcrum class, as a whole in these cases. Accordingly, the Committee believes the best course of action would be to terminate exclusivity and allow the Committee to propose a plan based on a transparent sale process employing well-established procedures that will maximize value.”

Read more Breitburn bankruptcy news.