Warren Resources plan of reorganization confirmed by bankruptcy court

By Caroline Salls

Pittsburgh, Sept. 14 – Warren Resources, Inc.’s plan of reorganization was confirmed Wednesday by the U.S. Bankruptcy Court for the Southern District of Texas.

The terms of the company’s restructuring include the following:

• Conversion of the claims of the company’s pre-bankruptcy first-lien lenders into 82.5% of the equity, subject to dilution by a management incentive plan, in the reorganized Warren debtors and a new first-lien secured term exit facility not to exceed $130 million, plus, at the plan sponsor’s option, the amount outstanding under a $20 million debtor-in-possession facility;

• Conversion of the claims of pre-bankruptcy second-lien lender Claren Road, senior noteholders and the claims of Citrus Energy into the remaining 17.5% of the equity in the reorganized company.

In addition, holders of second-lien facility claims will receive their portion of a Claren Road supplemental equity distribution and new warrants;

• Other general unsecured creditors will receive a discounted cash payment or notes equal to the economic value of the equity being provided to the second-lien lenders, senior noteholders and Citrus Energy; and

• Existing equity in Warren will be canceled, and holders will receive no further payments or recovery.

Warren, a New York-based energy company, filed for bankruptcy on June 2. The Chapter 11 case number is 16-32760.

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