Gastar Exploration – Files Combined Hearing on Joint Prepackaged Plan

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November 15, 2018 – Gastar Exploration filed with the Court a notice of commencement of its prepackaged Chapter 11 Plan and details relating to its Chapter 11 timetable [ Docket No. 179]. The notice also provides further information on projected recoveries.  The notice states, “The Plan is a ‘prepackaged’ plan of reorganization. The primary purpose of the Plan is to effectuate a balance-sheet restructuring of the Debtors’ business (the ‘Restructuring’). The Debtors believe that any valid alternative to confirmation of the Plan would result in significant delays, litigation, and additional costs, and, ultimately, would jeopardize recoveries for holders of allowed claims. The confirmation hearing of the Plan is on December 20, 2018 and objection deadline on December 17, 2018.”

The following is a summary of classes, claims, voting rights and projected recoveries:

  • Class 1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The projected amount of claims is $0 and projected recovery is 100%.
  • Class 2 (“Other Priority Claims”)  is unimpaired, deemed to accept and not entitled to vote on the Plan. The projected amount of claims is $0 and projected recovery is 100%.
  • Class 3 (“Hedge Party Claims”) is impaired and entitled to vote on the Plan. The projected amount of claims is $13.3 million and projected recovery is 100%. Payments are expected to be made in a number of instalments.
  • Class 4 (“Statutory Lien Claims”) is impaired and entitled to vote on the Plan. The projected amount of claims is $8.9 million and projected recovery is 100%. Payments are expected to be made in two 50% instalments.
  • Class 5 (“Term Loan Claims ”) is impaired and entitled to vote on the Plan. The projected amount of claims is $283.9 million and projected recovery is uncertain. Holders will receive their pro rata share of any new equity of the reorganized company that remains after Class 6 is paid.
  • Class 6 (“Second Lien Notes Claims”) is impaired and entitled to vote on the Plan. The projected amount of claims is $162.5 million. Holders will receive their pro rata share of 100% of the new equity of the reorganized company. 
  • Class 7 (“General Unsecured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The projected amount of claims is $0.5 million–$2.5 million and projected recovery is 100%.
  • Class (“8 Intercompany Claims”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan. Claims shall be, at the option of the Debtor, either reinstated or cancelled and released without any distribution. 
  • Class 9 (“Interests in Debtors other than Gastar”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan. Claims shall be, at the option of the Debtor, either reinstated or cancelled and released without any distribution. 
  • Class 10 (“Existing Preferred Interests”) is impaired, deemed to reject and not entitled to vote on the Plan. Holders will not receive any distribution in respect of their interests, but, if no opposition to the Plan is registered, will receive their pro rata share of new warrants.
  • Class 11 (“Existing Common Interests and Subordinated Securities Claims”) is impaired, deemed to reject and not entitled to vote on the Plan.  Holders will not receive any distribution in respect of their interests, but, if no opposition to the Plan is registered, will receive their pro rata share of new warrants.

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