An attorney representing Samson Resources’ unsecured creditors said Monday that the $4.9 billion Chapter 11 case appears headed toward costly litigation after the company filed a revised restructuring deal in Delaware bankruptcy court that would pay off a senior loan in full and hand control of the business to second lien lenders.
White & Case LLP partner Thomas Lauria, who is representing the official committee of unsecured creditors, told Law360 that a revised plan support agreement filed Friday by Samson was submitted to the court without any input from the committee. Lauria said the committee “is still digesting” the latest filing but indicated Samson’s revised plan won’t have the support of unsecured creditors.
“We see this new document as a declaration of war by the debtor against its estate,” Lauria said. “It’s a very disappointing development in a case that’s more than a year old.”
Samson said Friday it had entered into a revised plan support agreement with certain junior lenders that hold approximately 39 percent of its claims under a second lien term loan. Under the revised plan, Samson’s first lien lenders would see “a full recovery” and substantially all the equity in the reorganized company would be distributed to second lien lenders, according to the filing.
Lauria said the committee believes Samson's proposed plan improperly wipes away possible lien actions, discriminates against unsecured claims and cannot be confirmed. Samson, Lauria said, has been "unwilling" to deal with unsecured creditors.
Attorneys representing Samson did not immediately return a message seeking comment.
Samson, which operates or has royalty or working interests in about 8,700 oil and gas wells, sought protection from creditors in September 2015 and immediately faced claims that its troubles stemmed from an $8 billion leveraged buyout from the founding Schusterman family in 2011, led by Kohlberg Kravis Roberts & Co. LP affiliates and investors Crestview Partners,Itochu Corp. and Natural Gas Partners.
Last week’s filing represents the latest development in an ongoing battle for control of the Chapter 11 case between Samson and its unsecured creditors. The committee currently has a motion pending to allow unsecured creditors the ability to bring lawsuits on behalf of Samson’s estate over liens on the company’s assets.
According to the committee, Samson systematically transferred interest in company property to lenders in exchange for cash or loans needed to execute a “doomed” business plan.
Samson’s unsecured creditors have also filed a motion seeking to terminate the exclusive period in which the company is allowed to pursue its desired Chapter 11 plan.
Samson is represented by James Sprayregen, Paul Basta, Edward Sassower, Ross Kwasteniet, Brad Weiland, Yosef Riemer and Joshua Sussberg of Kirkland & Ellis LLP and Morton Branzburg of Klehr Harrison Harvey Branzburg LLP.
The committee is represented by Joseph J. Farnan Jr., Joseph J. Farnan III and Michael J. Farnan of Farnan LLP and Thomas E. Lauria, Glenn M. Kurtz, J. Christopher Shore, Michele J. Meises and Thomas MacWright of White & Case LLP.
The case is In re: Samson Resources Corp., case number 1:15-bk-11934, in the U.S. Bankruptcy Court for the District of Delaware.
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