Gasfrac monitor seeks U.S. recognition of Canadian plan approval order

By Kali Hays

New York, June 17 – Gasfrac Energy Services Inc.’s court-appointed monitor and foreign representative, Ernst & Young, LLP, is seeking recognition and enforcement from the U.S. Bankruptcy Court for the Western District of Texas of an impending order from the Canadian Court sanctioning the company’s proposed plan of compromise and arrangement, according to a Wednesday motion.

As previously reported, the company filed the plan with the Canadian Court in May and creditors are set to vote on the plan June 22.

If the requisite number of creditors vote to approve the plan, Gasfrac will seek a sanction order, which is the equivalent of a confirmation order under Chapter 11.

The monitor is requesting approval of the sanction order in advance “to ensure prompt recognition” and allow the case to proceed without interruption, according to the motion.

As reported, the proposed plan is a condition of a previously approved transaction with Calfrac Well Services Ltd., and the terms include the following:

• Unsecured creditors, with the exception of the subordinate debenture holders, will receive 100% of their proven claim valued as of the date of the initial order;

• The subordinate debenture holders shall receive a distribution of the remaining funds held by the Monitor;

• All issued and outstanding shares of GESI will be designated as retractable and will be retracted and canceled for no consideration;

• Gasfrac Holdings, GESI US, GI and Gasfrac Luxembourg Finance Sarl., a Gasfrac entity incorporated in Luxembourg, will be dissolved and their affairs wound up; and

• A new class of shares of GESI shall be created, and 100 new shares of the new class of shares of GESI shall be issued to Calfrac.

Calgary, Alta.-based Gasfrac provides liquefied natural gas fracturing services to oil and gas companies. The company filed bankruptcy on Jan. 15 in the U.S. Bankruptcy Court for the Western District of Texas under Chapter 15 case number 15-50161.

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