Samson committee blasts new plan, asks court to terminate exclusivity

By Caroline Salls

Pittsburgh, May 24 – Samson Resources Corp.’s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to terminate the company’s exclusive periods for filing and soliciting votes on a Chapter 11 plan to allow the committee to file an alternate plan, according to a motion filed Tuesday.

“Without any negotiation or input from the committee, the debtors filed a Chapter 11 plan that largely adopts the negotiating position of the putative first-lien lenders, hands those lenders tens of millions of dollars of unencumbered assets, grants the lenders releases without just compensation to the estates, purports to ‘preserve’ the secured lenders’ long-dead adequate protection claims and wrongfully provides free releases to the debtors’ equity sponsors,” the motion said.

“Making matters worse, the debtors’ newest plan attempts to force unsecured creditors to accept all of its terms through a coercive deathtrap mechanism that places all unsecured creditors at risk of receiving no recovery at all if they vote to reject the plan.”

The committee said Samson was aware that it had been working with some of their largest unsecured creditors to develop a new-money plan premised on an all-cash offer to the secured lenders and that would provide a significant return to the Samson estates and unsecured creditors.

Despite acknowledgement of three flaws in the original version of the plan, the committee said the Samson debtors “proposed a heavily engineered Rube Goldberg structure that once again pits the unsecured community against the secured lenders, the sponsors and the debtors.”

“The debtors’ amended plan on file represents a no win choice for unsecured creditors: Vote for the plan and get less than one would in a Chapter 7 liquidation; fight the plan and either get nothing or end up six months down the road with no plan and administrative expenses running out of control,” the committee said.

“That is a threat, not a plan, and the committee obviously will oppose any effort of the debtors to push their agenda through to confirmation.”

The committee said it wants the opportunity to file an alternative plan that lays out the unsecured creditors’ view of appropriate allocations and lets both secured and unsecured creditors consider and vote on both plans on a parallel track and then have the court decide which should be confirmed.

A hearing is scheduled for June 7.

Based in Tulsa, Okla., Samson is the largest privately held crude oil and natural gas company in the United States. The company filed for bankruptcy Sept. 16, 2015 under Chapter 11 case number 15-11934.

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