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Paragon’s Prospector subsidiaries file Chapter 11 after talks fail
New York, July 20 – Paragon Offshore Ltd. said that the Prospector group of old Paragon made voluntary Chapter 11 filings in the U.S. Bankruptcy Court for the District of Delaware after negotiations to transfer leases were unable to reach a mutually agreeable solution.
Paragon Offshore Ltd., which exited its own Chapter 11 case on July 18, said that the companies involved are subsidiaries of Paragon Offshore plc, the predecessor company, which is now in administration.
The subsidiaries are Prospector Offshore Drilling Sarl, Prospector Rig 1 Contracting Co. Sarl and Prospector Rig 5 Contracting Co. Sarl.
The Prospector group has an interest in two high specification jackup rigs under two sale-leaseback agreements executed with subsidiaries of SinoEnergy Capital Management Ltd.
As part of the leases, old Paragon’s shares in Prospector Offshore Drilling are pledged in favor of the lessors.
In order to transfer the Prospector group to new Paragon, new Paragon must obtain the consent of the lessors.
Negotiations have been under way since May but no agreement has been reached.
New Paragon said the Prospector group is “an important component” of its future business plan.
The Chapter 11 filing was made in order to preserve the value of the Prospector group for new Paragon and its new equity holders.
Paragon’s exit from Chapter 11 was delayed because of the lease problem and the company obtained court approval to modify the plan after confirmation to allow it to remove the condition that agreement be reached on the transfer of the leases.
Paragon Offshore is a Houston-based provider of offshore drilling rigs. Its Chapter 11 case number was 16-10386.
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