Green Field Energy files plan; restructuring support deal terminated

By Caroline Salls

Pittsburgh, Feb. 7 - Green Field Energy Services, Inc. filed a plan of liquidation and related disclosure statement Thursday with the U.S. Bankruptcy Court for the District of Delaware and withdrew a Dec. 31 motion for approval of a restructuring support agreement 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 court documents, the parties agreed to terminate the restructuring support agreement.

Green Field said it received bids in connection with the sale of its assets on Jan. 21. However, absent significant additional consideration generated at an auction, the company said the cash purchase price generated from the completion of any of those bids would not provide enough recoveries for the deal included in the restructuring support agreement.

As a result, Green Field negotiated the terms of Thursday's plan with key constituents, which is based on a settlement with Swepi, Moreno and Turbine.

Plan settlement

The company said the settlement centers around the contribution of interests by the Moreno entities to a new company in exchange for other new company interests and the releases.

In light of the current purchase price for the assets, Green Field said the noteholders are not willing to consent to a waiver of their deficiency claim, although the plan calls for a waiver of that claim.

As a result, the company and the noteholders are continuing to negotiate the terms of the plan.

The Moreno Entities, Turbine and Shell support the approval of the proposed plan, while the noteholders and Green Field's official creditors committee do not.

Trust roles

In addition, the plan provides for the liquidation of estate assets, including the investigation and prosecution of causes of action by a liquidation trust and investigation and prosecution of avoidance actions by a litigation trust.

Both trusts would be formed under the plan.

Creditor treatment

Treatment of creditors will include the following:

• Administrative claims, priority tax claims, priority non-tax claims, Shell secured claims and debtor-in-possession financing claims will be paid in full;

• Holders of other secured claims will either be paid in full in cash or will receive the collateral securing their claims to the extent that the collateral does not constitute collateral securing senior noteholder claims or, if it does secure the noteholder claims, to the extent that the lien securing the other secured claim is senior to that securing the senior noteholder claims;

• Holders of senior noteholder claims will be entitled to receive a share of 70% of the class A preferred equity of the new company, 50% of the class B preferred equity of the new company and 30% of the common equity of the new company, a specified interest will be transferred to the new company, and the senior secured notes indenture trustee will receive distributions of cash from the liquidation trust for the benefit of the noteholders until the total value contributed to the new company by the Green Field debtors and the liquidation trustee, plus the total value distributed to the indenture trustee is equal to the senior noteholder allowed claim amount.

Senior noteholder claims are not expected to be paid in full;

• Shell will receive a release in exchange for the "Shell other claim," and all rights related to the claim will be transferred to the debtors;

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

• Holders of subordinated other claims, subordinated stock claims, Green Field Energy interests and subsidiary interests will receive no distribution.

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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