Gavilan Resources files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., Oct. 21 – Gavilan Resources, LLC filed its joint Chapter 11 plan of liquidation and related disclosure statement Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas.

The debtors obtained court approval to sell all of Gavilan’s assets to Mesquite Energy, Inc. for $50 million under an asset purchase agreement that was approved by the court on Oct. 16, as previously reported.

Under the plan, holders of other secured claims and other priority claims will be paid in full in cash.

Holders of RBL lenders claims will receive their pro rata share of the sale proceeds and the initial distribution of remaining cash of any excess funds beyond those reserved for the wind-down process or otherwise reserved for or distributed in satisfaction of the allowed administrative expense claims and allowed fee claims.

Holders of second-lien claims, general unsecured claims and existing equity interests will not receive any distribution.

A plan confirmation hearing is set for Nov. 30.

Gavilan Resources is a Houston-based private company established in 2017 in partnership with Blackstone to acquire, develop and produce oil and natural gas assets in the Eagle Ford Shale play in South Texas. The company filed bankruptcy on May 15 under Chapter 11 case number 20-32656.

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