Marion Energy denied access to DIP funds; June case dismissal possible

By Kali Hays

New York, Dec. 12 – Marion Energy Inc. received a denial of its request to access $700,000 of a proposed $4.2 million debtor-in-possession loan from KM Custodians Pty Ltd, according to a Dec. 12 order from the U.S. Bankruptcy Court for the District of Utah.

The court also denied a request by Castlelake LP and TCS II Funding Solutions, LLC to dismiss Marion’s Chapter 11 case, but ordered the company to pay back the outstanding amount under its credit agreement with TCS and Castlelake by June 1, or its case will be dismissed with prejudice.

If the case is dismissed, TCS and Castlelake will be allowed to record notices of default and pursue a foreclosure sale no earlier than June 10.

As previously reported, Marion filed for bankruptcy due to a lack of operational funds and Castlelake refusing to grant the company further forbearance on its credit agreement.

Marion’s director, Jeffrey Clarke, said the company planned to pay back creditors in full and continue company operations after it obtained new financing and confirmed a Chapter 11 plan.

Marion is an Allen, Texas-based natural gas exploration company that filed for bankruptcy Oct. 31. The Chapter 11 case number is 14-31632.

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