Holders of Maverick's secured convertible debentures foreclose on company's assets; officers resign

By Devika Patel

Knoxville, Tenn., Dec. 21 - Maverick Oil and Gas, Inc. has entered into a strict foreclosure agreement with the holders of its secured convertible debentures and the transferees of their interests to settle its default on the notes, according to an 8-K filed Friday with the Securities and Exchange Commission.

Under the agreement, the holders have foreclosed upon the company's interest in the Fayetteville Shale project through foreclosure upon its interest in Maverick Woodruff County, LLC, which holds its leasehold interests in the Fayetteville Shale project; Maverick Operating, LLC, the licensed operator of the Fayetteville Shale project; and miscellaneous seismic data and files related to the company's Fayetteville Shale project.

The company said that its obligations now have been extinguished through the agreement.

Following the foreclosure process, the company terminated most of its personnel and ceased all oil and gas related operations. However, its remaining cash assets will only be sufficient to sustain it as an inactive company for the short-term.

"There can be no assurances that we will be able to identify a suitable business opportunity or the financing necessary to complete a transaction, or that any business we may acquire will generate profits or increase the value of the company. If we are unable to execute on our business plan within the short-term, we will be forced to suspend all public reporting with the SEC and possibly liquidate," Maverick said in the filing.

On Dec. 17, the filing said Andrej Rucigaj and Mathew Fitzgerald resigned as directors of the company, effective immediately. That same day, Stephen M. Cohen resigned his position as interim chief executive officer. Concurrent with his resignation, chief financial officer and director John A. Ruddy was appointed as the interim chief executive officer of the company.

As previously reported, a Dec. 7 8-K said that the company was notified on Dec. 3 by holders of its debentures that it was in default of its obligations under the notes' terms.

The note holders informed the company that, under the pledge and security agreement dated July 30, an event of default occurred because Maverick admitted in writing that it was unable to pay its debts. The statements were made in an 8-K filed on Dec. 3 with the Securities and Exchange Commission, according to the filing.

Dallas-based Maverick is an oil and natural gas exploration, exploitation, development and production company.

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