Energy XXI unsecured creditors object to equity committee proposal

By Sheri Kasprzak

New York, June 13 – Energy XXI Ltd.’s committee of unsecured creditors filed an objection Monday hoping to hold off a motion filed by the company to appoint a committee of equity holders, claiming equity holders cannot be assured a distribution in the Chapter 11 settlement, said a filing with the U.S. Bankruptcy Court for the Southern District of Texas.

The committee contends in its objection that the appointment of an official equity committee is considered “extraordinary relief and should be the rare exception.”

The ad hoc committee, according to the committee of unsecured creditors’ objection, failed to carry its burden of demonstrating Energy XXI’s equity holders will receive a meaningful distribution under the strict application of the absolute priority rule and they cannot adequately represent their interests without an official committee.

“Moreover, the appointment of an official committee of equity holders would be costly to the debtors’ estates and would unfairly delay the reorganization, to the detriment of all parties with a demonstrable economic stake in the debtors estates,” said the objection.

“These costs would not only consist of the direct fees and expenses of any such official equity committee, but would multiply with the inevitable fees and expenses of other parties-in-interest (whose fees must also be paid by the debtors’ estates) in dealing with the official equity committee.”

Energy XXI, an independent oil and natural gas development and production company based in Houston, filed for bankruptcy April 14 under Chapter 11 case number 16-31928.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.