Bankruptcy Debrief for the Week of October 29th


Gastar Files for Chapter 11 With Prepackaged Plan

Gastar Exploration sought chapter 11 protection to effectuate its prepackaged plan that would exchange the oil and natural gas exploration and production company’s existing debt for equity. The plan is supported by the secured debtholder, Ares Management, which is also the largest common shareholder.

The proposed plan would eliminate over $300 million of debt and pump $100 million of new money into the company that will be used to fund the cases as part of the debtor-in-possession financing and then convert into the exit facility.

Gastar said the restructuring was its best option after it was unsuccessful in finding other options to either repay or refinance its existing debt to Ares. As of the filing, the company had about $446.4 million of funded debt, comprising $283.9 million of first-lien term loans and $162.5 million in principal amount of second-lien notes. The company expects to emerge from chapter 11 by the end of the year.

Read CFO Michael Gerlich’s declaration in support of the first day motions here.

Chapter 11 Petition.


Egalet Seeks Balance-Sheet Cure With Prearranged Plan in Chapter 11

Pharmaceutical company Egalet Co., maker of SPRIX Nasal Spray and OXAYDO oxycodone tablets, filed for chapter 11 to both acquire certain products from Iroko Pharmaceuticals and to facilitate a debt conversion and debt-for-equity swap, allowing emergence in two months.

The company has already laid forth the terms of a prearranged plan that includes converting $80 million of first-lien notes into $50 million of new notes, about 19% equity in the reorganized company and $20 million in cash, among other things. The unsecured convertible notes of which $48.6 million remain outstanding, will be converted into about 31% equity of the reorganized company. All general unsecured claims would be reinstated. The prearranged plan is supported by the majority of existing debtholders.

The purchase portion of the transaction would include FDA-approved SoluMatrix anti-inflammatory products VIVLODEX TIVORBEX, ZORVOLEX and INDOCIN. The total consideration for the Iroko products is proposed to be $45 million in new secured notes, 49% of the new equity and a royalty of Indocin net sales over $20 million.

Read CEO Robert Radie’s declaration in support of first day motions here.

View the chapter 11 petition here.


Dixie Electric Takes Its Stand in Bankruptcy Court

Houston-based Dixie Electric, aka Expanse Energy Solutions, filed a prearranged chapter 11 plan to cut $300 million of debt and hand over all equity to the lenders. Dixie has support of over 2/3rds of the secured lenders in the plan.

Dixie operates in the oil and gas industry, more specifically as a privately held provider of electrical infrastructure materials. Along with the majority of the oil and gas industry, Dixie has seen a rather steady decline in both activity and financials since 2014.

As of the filing, Dixie’s was roughly $295 million of funded debt comprising $19.6 million of revolving loans, $267.4 million of term loans and $8 million of unsecured loans. The case will be funded by a $17.5 million loan from existing secured lenders.

Read CEO Jerrit Coward’s declaration in support of first day motions here.

View the chapter 11 petition here.





Print Friendly, PDF & Email

About Author

Leave A Reply