Foothills Resources' reorganization plan approved by bankruptcy court

By Caroline Salls

Pittsburgh, Feb. 1 - Foothills Resources, Inc.'s plan of reorganization was confirmed Friday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Foothills' pre-bankruptcy lender Regiment will receive 100% of the new common stock in the reorganized company in exchange for its secured claim.

Treatment of creditors will include:

• Holders of administrative claims, debtor-in-possession facility claims, priority non-tax claims and priority tax claims will be paid in full in cash;

• Holders of Wells Fargo Foothill secured claims will be paid in full in cash from the initial borrowing on the company's exit facility;

• Holders of the Regiment secured claim will receive 100% of the new common stock in the reorganized company and a new Regiment note;

• Holders of secured M&M lien claims will be paid in full in cash over a five-year period;

• Holders of other secured claims will be paid in full either in cash on the effective date or in deferred cash payments with interest at the Prime rate, at the company's option;

• Holders of secured tax claims will be paid in cash in 20 payments over five years with 12% interest;

• Holders of unsecured claims will receive a share of $400,000 in cash to be paid in 20 installments over five years with 5% interest;

• Holders of convenience claims of $10,000 or less will be paid in full in cash, provided that the total distribution to these creditors will not exceed $250,000;

• Holders of intercompany claims and interests in debtors other than Foothills Resources will receive no distribution; and

• Holders of PIPE liquidated damages claims and Foothills Resources interests will receive a share of trust beneficial interests if they vote to accept the plan.

Foothills Resources, a Bakersfield, Calif.-based energy company, filed for bankruptcy on Feb. 11, 2009. Its Chapter 11 case number is 09-10452.

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