Memorial Production disclosure approved; plan hearing set for April 4

By Caroline Salls

Pittsburgh, Feb. 27 – Memorial Production Partners LP received court approval of the disclosure statement for its pre-packaged plan of reorganization, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan confirmation hearing is scheduled for April 4.

As previously reported, the company’s financial restructuring will be implemented in accordance with a plan support agreement with some of its noteholders and lenders.

The financial restructuring is expected to eliminate more than $1.3 billion of debt from the partnership’s balance sheet and enhance its financial flexibility.

The restructuring terms include the following:

• Cancellation of more than $1.1 billion principal amount of outstanding notes, with noteholders receiving 98% of the common equity interests of the restructured company. Noteholders may elect to receive another $24.6 million in cash;

• Providing the partnership’s limited partners with a recovery in the form of 2% of reorganized equity and five-year warrants to acquire another 8% of the total outstanding equity in the reorganized company at an exercise price based upon the outstanding principal amount plus accrued interest;

• Structuring to try to minimize the negative tax impact of cancellation of debt income to the partnership’s existing limited partners with the partnership expected to emerge from a financial restructuring plan as a corporation for U.S. federal income tax purposes; and

• Ensuring full payment of “ordinary course trade obligations.”

Memorial is focused on the acquisition, production and development of oil and natural gas properties in the United States. The Houston-based company filed bankruptcy on Jan. 16 under Chapter 11 case number 17-30262.

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