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Emerge Energy disclosure statement OK’d; plan hearing Oct. 24
By Caroline Salls
Pittsburgh, Sept. 12 – Emerge Energy Services LP obtained court approval of the disclosure statement for its plan of reorganization, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.
The plan confirmation hearing is scheduled for Oct. 24.
Emerge announced in an April 22 news release that it had entered into a restructuring support agreement with operating subsidiary Superior Silica Sands LLC and the partnership’s other subsidiaries, general partner Emerge GP, some of Emerge GP’s equityholders, the lenders under Emerge Energy’s revolving credit facility and the noteholders under Emerge Energy’s second-lien note purchase agreement.
Under the restructuring, Emerge Energy’s revolving credit agreement obligations will be paid in full.
Noteholders under the note purchase agreement will receive new second-lien secured notes and ownership interests in new common units representing a 100% limited partner interest in the partnership. If holders of general unsecured claims vote to accept the company’s Chapter 11 plan, the noteholders have agreed to carve out from their collateral and receipt of interests a settlement fund to be shared collectively by those creditors and holders of existing equity in the partnership.
The settlement fund will consist of 5% of the new common units in the partnership, subject to dilution, and out-of-the-money warrants for 15% of the new common units in the partnership.
If the general unsecured claims class votes to reject the Chapter 11 plan, then those claimants and the existing equityholders will receive no distribution.
Southlake, Tex.-based Emerge Energy Services is a limited partnership formed in 2012 by management and affiliates of Insight Equity Management Co. LLC to own, operate, acquire and develop a portfolio of energy service assets. The company filed for bankruptcy on July 15 under Chapter 11 case number 19-11563.
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