Sanchez Energy noteholder group’s examiner appointment motion OK’d

By Caroline Salls

Pittsburgh, Dec. 13 – An informal group of Sanchez Energy Corp. noteholders’ motion for appointment of an examiner with the power to prosecute claims against the company and its insiders was approved Thursday by the U.S. Bankruptcy Court for the Southern District of Texas.

The examiner will be appointed by the U.S. Trustee overseeing Sanchez’s case.

A hearing on determining the scope of the examiner’s duties will be held on Feb. 3.

In the meantime, the court ordered the examiner to become familiar with and educated about the Sanchez debtors, the estates and the issues in the bankruptcy cases.

“Since long before the petition date, Sanchez Energy has been operated for the benefit of the Sanchez family, who have saddled the company with a myriad of unfair and burdensome practices and obligations,” the motion said.

Although the Sanchez family no longer owns most of Sanchez Energy’s stock, the noteholders said the family has stayed in control through board and senior management positions, as well as through shared services, gathering and “other oppressive contracts with affiliates owned and/or controlled by the Sanchezes.”

The noteholders said millions of dollars have been taken from insolvent Sanchez Energy to pay executive compensation, fund other Sanchez family businesses and satisfy over-market contractual obligations.

Although a special committee of independent directors was appointed more than a year ago, the noteholders said “it has become readily apparent that this measure has done nothing to stop the bleeding or to recover anything that had already been drained.”

Specifically, the noteholders said the independent directors “appear to have no idea as to what their independent’ counsel is ‘investigating,’ and have taken no apparent action to protect the interests of creditors vis-a-vis those of the Sanchez family and affiliates, which remain firmly in control.”

Sanchez is a Houston-based oil and gas exploration and production company. The company filed bankruptcy on Aug. 11 under Chapter 11 case number 19-34508.

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