Weatherford shareholders request official committee, investigation

By Caroline Salls

Pittsburgh, July 22 – An informal committee of Weatherford International plc equityholders asked the U.S. Bankruptcy Court for the Southern District of Texas to appoint an official committee of equity security holders for Weatherford’s Chapter 11 case, according to an emergency motion filed Monday.

The equityholders said the board of directors for Weatherford’s parent company solicited votes from shareholders just 60 days before the bankruptcy filing date for a reverse stock split to keep the parent company’s common stock trading on the New York Stock Exchange and make existing equity more attractive to investors.

“Ten days later, that decision was abruptly reversed,” the motion said.

Specifically, the shareholders said the company announced on May 10 that it had entered into a restructuring support agreement with its noteholders, trading in the shares was suspended, and, the next day, the stock was delisted.

“At first, the company was championing its stock, then hundreds of millions of dollars in market capitalization were erased overnight,” the motion said.

The shareholders said the company’s management stands to receive a 400% greater recovery under its Chapter 11 plan than current shareholders will receive, and noteholders and management will get a majority of the new common stock to be issued under the plan.

The informal committee said the noteholders’ “windfall should not come at the expense of the shareholders.”

According to the motion, a statutory equity committee is needed to conduct an investigation regarding the events leading to the restructuring support agreement and the treatment under the plan, including proposed broad releases.

“In addition, beyond an investigation, the shareholders need advocacy,” the motion said. “A statutory equity committee will provide an appropriate means to address these concerns, and others, as they arise, and provide equal footing for shareholders.”

Weatherford is an oilfield services company based in Baar, Switzerland. The company filed bankruptcy on July 1 under Chapter 11 case number 19-33694.

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