Seitel's exclusivity right terminated in court

By Carlise Newman

Chicago, Nov. 4 - Seitel Inc.'s right to exclusively propose restructuring plans in the company's Chapter 11 bankruptcy proceeding has been terminated by the U.S. Bankruptcy Court, District of Delaware.

A judge ruled that shareholders had a right to propose their own plan. Currently, Seneca Financial Group is advising the committee on the structure of such a plan.

Under the committee's alternative plan, shareholders will have the opportunity to participate in an offering to inject new equity into the Houston-based seismic data company, and preserve their stake in the company. This will allow the debt held by Berkshire Hathaway to be reinstated and paid down as it comes due.

While voting on Berkshire Hathaway's plan is currently under way and runs through Nov. 7, individuals will be able to vote on both plans by Nov. 13. Those who have already voted will be able to change their vote.

"Before today, shareholders had no choice but to accept the financial terms of the company's plan. This would have meant that each shareholder would have received, at most, $0.40 for each share of stock," said James Harris, president of Seneca Financial Group, in a news release.

"With the Judge's decision, we can now offer a plan that reflects the full value that still exists in Seitel and offers shareholders a continued stake in what we believe to be a solid company with a bright future. This plan is being supported by many large sophisticated investors who are willing to commit additional funds to see a strong, liquid Seitel emerge from bankruptcy."

Seneca will have the opportunity to make its case that Seitel continues to offer significant shareholder value. The hearing on valuation will take place on Dec. 3.

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