Erin Energy interim DIP loan order amended to address protection issue

By Caroline Salls

Pittsburgh, July 12 – Erin Energy Corp.’s interim debtor-in-possession financing order was amended Thursday by the U.S. Bankruptcy Court for the Southern District of Texas in response to secured lender Zenith Bank plc’s claim that the DIP loan does not leave it adequately protected.

As previously reported, the court granted Erin Energy interim access to a $1.1 million DIP loan from Greg Holcombe on June 25.

Thursday’s order clarifies the definition of third-party liens.

Zenith said in its objection to the DIP financing agreement that Erin Energy stated that the DIP lender “will not agree to the debtors’ current proposed final budget or loan any new funds to the debtors. Under these circumstances, the debtors believe that the likelihood of obtaining replacement financing is extremely low. Thus, the debtors cannot proceed with final approval of their DIP loan and have no source of financing moving forward.”

Erin Energy said the loan would be used to fund payroll and other immediate needs.

Based in Houston, Erin Energy is an explorer, developer and producer of oil and gas. The company filed bankruptcy on April 25 under Chapter 11 case number 18-32106.

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