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Harvest Oil unsecured, equity committees hold out hope for recovery
By Angela McDaniels
Tacoma, Wash., Oct. 27 - Harvest Oil & Gas LLC's official committee of equity security holders and official committee of unsecured creditors continue to believe that equity exists in the company, according to a Monday filing with the U.S. Bankruptcy Court for the Western District of Louisiana.
The company filed an emergency motion seeking authorization of the use of cash collateral, and a hearing was held during the first week of October.
According to a post-hearing briefing filed by the committees, a comparison of the cash and net receivables value shows that the company's cash has increased by at least $13.27 million since it filed for bankruptcy while its net accounts receivable have only decreased $1.73 million, leaving a gain of approximately $11.5 million.
The committees believe the improving cash position supports the continued use of cash collateral.
Also covered by the hearing was the valuation of the company's non-cash assets for the purposes of confirming a plan of reorganization and as an aid in the resolution of the motion to terminate exclusivity brought by Wayzata Investment Partners LLC.
"The debtors and Wayzata presented remarkably different pictures of value, one perhaps too optimistic and one far too pessimistic. ... The debtors presented countless hours of testimony on the potential for [its oil and gas] fields and Wayzata kept emphasizing the fact that only one well had been drilled in four years.
"Nobody will know which expert was correct until the wells and fields are completely produced. Unfortunately, the court is being asked to make a decision now and both committees believe the great weight of evidence reveals that equity does exist in the debtor."
Harvest is an Austin, Texas-based oil and gas exploration and production company. It filed for bankruptcy on March 31, 2009 and its Chapter 11 case number is 09-50397.
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