Vanguard Natural disclosure statement approved; plan hearing July 18

By Caroline Salls

Pittsburgh, June 2 – Vanguard Natural Resources, LLC received court approval of the disclosure statement for its second amended plan of reorganization, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan confirmation hearing is scheduled for July 18.

As previously reported, Vanguard reached an agreement with its official committee of unsecured creditors and consenting senior noteholders on Chapter 11 plan treatment for general unsecured creditors. As part of the agreement, the committee has agreed to support the plan.

According to the amended plan, holders of general unsecured claims will receive either a share of an equity pool and, if the holder is eligible, the opportunity to participate in a rights offering, or will participate in a cash pool for an amount equal to 12% of its claim.

Also under Vanguard’s plan, electing lenders will become term loan lenders as part of the treatment of their obligations through take-back paper in an amount equal to the lender’s share of a total of $93.75 million.

In addition, some of the consenting senior noteholders will also become term lenders upon their acquisition of $31.25 million in principal amount of term loans.

Holders of lender claims are slated to receive a full recovery in cash in the amount of their credit agreement interest, plus cash in the amount of a share of specified sale proceeds.

Holders of second-lien notes claims will receive $78.08 million in new notes plus interest accrued through the plan effective date.

Holders of senior notes claims will receive a share of 97% of the new common stock in the reorganized company, as well as the opportunity to participate in the company’s rights offerings.

Holders of preferred units and warrants will receive a share of new units and warrants under conditions set in the plan, including acceptance of the plan by several creditor classes.

Holders of common units and warrants will receive a share of warrants under conditions set in the plan, including acceptance of the plan by several creditor classes.

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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