Sabine committee appeals cash use extension, objects to disclosure

By Caroline Salls

Pittsburgh, April 21 – Sabine Oil & Gas Corp.’s official committee of unsecured creditors appealed a court order extending the expiration date for the company’s cash collateral use and objected to approval of the disclosure statement for Sabine’s Chapter 11 plan, according to Thursday filings with the U.S. Bankruptcy Court for the Southern District of New York.

On April 7, the company’s cash collateral use was extended to May 15. The expiration date can be further extended to June 15 and July 16 without the need for further court approval, as long as the first-lien agent consents to the extensions.

The committee said in the appeal that it had objected to the extension of the expiration date.

In Thursday’s disclosure statement objection, the committee said the proposed document “fails to provide adequate information on several critical matters, and the proposed procedures by which the debtors seek to solicit acceptances on the proposed plan of reorganization suffer from both substantive and procedural infirmities.”

Specifically, the committee said unsecured creditors need more information on pre-bankruptcy secured parties’ collateral, the terms of the reorganized entities’ articles of incorporation and bylaws, as well as reorganization loans and securities and the terms of a claim settlement that is the sole source of recovery for unsecured creditors under the plan.

In addition, the committee said Sabine separately classifies “without justification” multiple classes of similarly situated unsecured creditors “for the apparent purpose of creating the impression that the plan will be accepted by multiple impaired unsecured creditor classes, when in fact it will likely only be accepted by a single impaired secured class.”

Formerly Forest Oil Corp., Sabine is an oil and gas company based in Houston that filed for bankruptcy on July 15, 2015. The Chapter 11 case number is 15-11835.

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