Bonanza Creek equity holders condemn reorganization plan as ‘brazen’

New York, March 10 – Bonanza Creek Energy, Inc.’s ad hoc committee of equity security holders criticized the company’s plan of reorganization as “part of a brazen attempt” by noteholders supporting the plan and management “to abscond with the value that belongs to equity holders.”

In an objection filed Thursday with the U.S. Bankruptcy Court for the District of Delaware, the equity security holders called on the court to deny confirmation of the plan and to hold a valuation hearing instead.

To divert value, the plan gives an “indefensibly low total enterprise valuation,” the equity committee said.

The committee said it has already backed its words with action by offering a “better and higher” proposal for reorganization that requires the equity group to put up $350 million.

In addition, the ad hoc committee observed that the market “is not buying” the claims made by the supporting noteholders and the company because Bonanza Creek’s unsecured notes are currently trading close to par.

Unsecured creditors, the group added, would be paid more than 100% of the value of their claims because the equity is in the money.

The confirmation hearing is scheduled for March 17.

Bonanza Creek is a Denver-based oil and natural gas company. It filed for bankruptcy on Jan. 4. The Chapter 11 case number is 17-10015.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.