Saratoga Resources equityholders seek official representation

By Caroline Salls

Pittsburgh, July 14 – An informal committee of Saratoga Resources Inc.’s equity security holders asked the U.S. Bankruptcy Court for the Western District of Louisiana to order appointment of an official committee of equity security holders for the company’s Chapter 11 case, according to a motion filed Tuesday.

“The appointment of an equity committee will assure adequate representation of the debtors’ equity security holders, who are key constituents to these proceedings and whose interests are clearly lacking in representation,” the informal committee said.

“That lack of representation is evidenced by the pre- and post-petition agreements foisted on the debtors by the secured creditors.”

The equityholders said the Saratoga debtors “are a far cry from ‘hopelessly insolvent,’” which is the threshold standard used by bankruptcy courts when considering a request for the appointment of an equity committee.

According to the motion, the company is approaching a key hearing proposing to enter into final orders on important matters, such as the use of cash collateral, which could have ramifications for the remainder of the proceedings.

The equityholders said it is critical that an official committee be formed “to counter-balance the influence of the constituencies in these proceedings.”

Saratoga Resources is an oil and natural gas exploration and production company based in Houston. The company filed bankruptcy on June 18 under Chapter 11 case number 15-50748.

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