Triad files reorganization plan based on Magnum Hunter sponsorship

By Caroline Salls

Pittsburgh, Nov. 2 - Triad Energy Corp. filed a plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the Southern District of Ohio.

Magnum Hunter Resources Corp. will serve as the plan sponsor, subject to overbid.

As previously reported, Triad has entered into a definitive agreement to sell substantially all of its oil and gas exploration and production operating assets to Magnum Hunter for $81 million.

In addition, Magnum Hunter has agreed to pay cash, issue securities and assume or refinance Triad's outstanding debt.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full;

• Holders of pre-bankruptcy lender claims will receive one or more promissory notes from the plan sponsor, preferred share certificates from the plan sponsor and an interest in a litigation trust in satisfaction of lender deficiency claims;

• Holders of mechanics' lien claims will receive cash equal to the amount of the lien claim against subject assets and a general unsecured claim to cover any balance;

• Holders of other secured claims will be paid in full in cash and a general unsecured claim to cover any remaining balance;

• Holders of general unsecured claims will receive a share of litigation trust proceeds; and

• Holders of intercompany claims and equity interests will receive no distribution.

Triad Energy is a Reno, Ohio-based oil and natural gas exploration and production company focused exclusively in the Appalachian Basin. The company filed for bankruptcy on Dec. 31, 2008. The case number is 08-62733.

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