Green Field Energy secures restructuring support, must sell assets

By Caroline Salls

Pittsburgh, Dec. 31 - Green Field Energy Services, Inc. requested court approval of a restructuring support agreement reached with Michel B. Moreno and related trusts, Turbine Powered Technology, LLC, Swepi, LP and holders of at least 66.7% of the company's 13% senior secured notes due 2016, according to a Dec. 31 filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the agreement, the parties will vote to accept the company's Chapter 11 plan, which must be filed by Feb. 7. A proposed plan of reorganization term sheet also requires Green Field to file a motion for the sale of substantially all of its assets.

The support agreement also requires the related disclosure statement to be approved by March 10, the asset sale to close by April 11 and the plan to be confirmed and the effective date to have occurred by April 30.

Plan terms

The terms of the proposed plan will include the following:

• The Moreno entities will transfer all of their MOR/TGS interests in exchange for a contribution of equity to a newly formed company (NewCo) 30% of the class A preferred equity, 50% of the class B preferred equity and 70% of the common equity of NewCo and a plan release;

• Turbine will release all claims, rights and causes of action and consent to the assignment of equity, the assumption and assignment of the license of intellectual property to Green Field and deliver specified equipment without further payment in exchange for releases and payment of $12 million of the sale proceeds, which will be used for working capital purposes and not distributed to Turbine's members;

• The noteholders will receive $40 million of the sale proceeds, which will be paid directly to Swepi, 70% of the class A preferred equity of NewCo, 50% of the class B preferred equity of NewCo and 30% of the common equity of NewCo;

• Swepi will stipulate to the avoidance of general liens, cap its turnover rights on account of noteholder shared collateral secured claims at $40 million and not assert any other turnover rights and release a Moreno collection guaranty in exchange for $5 million of the cash on hand and sale proceeds on account of perfected liens, a Swepi turnover distribution and the release of all claims, rights and causes of action;

• On the effective date, the capital stock of NewCo will consist of class A preferred equity, with a $300 million liquidation preference, which will not be entitled to any dividends; class B preferred equity, with a $300 million liquidation preference after payment in full in cash of the class a equity, which will not be entitled to any dividends; and common equity;

• Provided that the total amount of other secured claims does not exceed $3 million plus the allowed amount of other secured claims held by Ford Motor Credit Co., LLC and Nations Fund I Inc., the holders of other secured claims will either be paid in full in cash or receive the collateral securing the claims;

• On the plan effective date, $24 million of Green Field's cash on hand and sale proceeds will be transferred to its estates for payment of administrative, priority and unsecured claims;

• To the extent the value of a NewCo cash distribution and noteholder distribution exceed the allowed amount of noteholder claims, the excess will be contributed to a litigation trust in cash;

• A litigation trust will be settled with any and all Chapter 5 causes of action, other than those released under a Moreno settlement, the first $1 million of any amount by which the distribution exceeds allowed administrative and priority claims and all amounts by which the total value of the new company cash distribution and the noteholder distribution exceeds the amount of noteholder claims;

• Holders of allowed general unsecured claim will receive a share of the interests in the litigation trust; and

• Holders of existing warrants and existing equity interests will receive no distribution.

A hearing is scheduled for Feb. 4.

Green Field is a Lafayette, La.-based energy services company that operates in the well services and hydraulic fracturing services lines. The company filed for bankruptcy on Oct. 27 under Chapter 11 case number 13-12783.

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