Vanguard Natural shareholder group questions plan, opposes extension

By Caroline Salls

Pittsburgh, May 17 – An informal committee of Vanguard Natural Resources, LLC’s preferred and common units objected to approval of the disclosure statement for the company’s Chapter 11 plan, according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas.

The committee said the company “hastily filed a plan and disclosure statement” based on a pre-bankruptcy negotiated restructuring support agreement with a subset of holders of its second-lien notes and unsecured senior notes.

“As readily apparent from the four corners of the plan and disclosure statement, these documents and underlying terms were half-baked, with gaping holes of information and a flawed valuation premise,” the objection said.

Since the initial disclosure statement hearing, the unitholders said Vanguard has sought five hearing continuances and has “repeatedly promised a wholesale amendment of the plan and disclosure statement.”

The equity holders said they have sought discovery related to the plan documents, and the court warned the company that the disclosure statement would not be approved if it did not provide information to the committee and other parties.

However, the committee said Vanguard is now withholding information by claiming a common interest privilege with a subset of constituencies, a move with the shareholders call “unprecedented.”

As a result, the committee said the company’s credibility is in question, as is whether any plan based on the support agreement is being proposed in good faith.

“Under the circumstances, and so long as the debtors are shielding disclosure of communications and documents surrounding the RSA and the plan, the equity committee objects to the extension of the exclusive periods,” the filing said.

Vanguard is a Houston-based oil and gas exploration and development company. The company filed for bankruptcy on Feb. 1 under Chapter 11 case number 17-30560.

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