BJ Services creditors committee raises concerns about Chapter 11 plan

By Caroline Salls

Pittsburgh, Sept. 10 – BJ Services, LLC’s official committee of unsecured creditors objected to the proposed conditional approval of the disclosure statement for the company’s Chapter 11 plan, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

“In the extremely short time the committee was given to review the combined plan and DS, it was immediately (and surprisingly) apparent that it did not include a liquidation trust for the benefit of unsecured creditors, but instead provided for the continuance of the post-effective-date debtors and the establishment of a wind-down trust controlled entirely by the debtors,” the objection said.

The committee said it did receive a new draft of the combined plan and disclosure statement that included provisions for the establishment of a liquidation trust, but that trust was “largely illusory” because it was not adequately funded and no clear path was provided to actually receive any assets for the benefit of unsecured creditors.

The creditor group said the revised draft kept the wind-down trust and appeared to give the post-effective-date BJ Services debtors control over nearly all of the estates’ remaining assets.

The committee is asking the court to allow it to include a letter in the plan solicitation package stating its position on the plan and noting that, based on the current status of its review and investigation, the committee is not currently in a position to recommend to unsecured creditors that they vote to accept the plan.

BJ Services is a Tomball, Tex.-based provider of hydraulic fracturing and cementing services to upstream oil and gas companies. The company filed bankruptcy on July 20 under Chapter 11 case number 20-33627.

© 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.