Samson Resources Corp. and its creditors aired full details Wednesday of a proposed global settlement in the oil and gas producer's long-running, $4 billion Chapter 11 restructuring battle, setting the stage for a Delaware court hearing Thursday.
The agreement includes a $670 million payment to the company's first-lien lenders within five days or "as soon as reasonably practicable" after an approval order, subject to lender agreement to support the deal and an associated exit financing plan.
A company stipulation and disclosure statement filed with U.S. Bankruptcy Judge Christopher S. Sontchi's court said that first-lien lenders will ultimately be paid their full $945.8 million claim, with cash as well as new secured debt and proceeds from asset sales, if any.
"The plan preserves the equity value upside of the debtors as a reorganized company and provides improved recoveries for unsecured creditors," the company's revised disclosure statement said.
Second-lien lenders will receive all of the company's equity and 22 percent of the group's more than $1 billion in claims, while unsecured creditors will receive between $168.5 million and $180 million, to be funded from asset sales, proceeds from a second-lien lender new money rights offering, and a letter of credit, if needed.
"The plan is the culmination of over two years of restructuring efforts, including months of settlement negotiations and a multiweek mediation process undertaken by the primary creditor constituents in these Chapter 11 cases," the disclosure said.
The stipulation said all sides agreed to "not take, or cause or encourage any person to take, directly or indirectly, any action to interfere with, delay, or otherwise frustrate" settling all parts of the agreement.
Samson became one of the larger energy producers to seek protection from creditors in U.S. bankruptcy courts in the wake of the oil and natural gas price slump of recent years. The company operates or has royalty or working interests in about 8,700 oil and gas wells, and filed for Chapter 11 protection in September 2015, listing more than $4 billion in debt.
Much of the debt stemmed from Samson's 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, according to court records.
Battling among the company's creditors has been intense, with Judge Sontchi presented with competing restructuring plans prepared by the company and by its creditors committee, with the committee proposing a liquidation of the company to pay creditors.
Under the revised version of the disclosure filed on Wednesday, general unsecured creditors will recover from 7 to 7.5 percent of their more than $2.4 billion in allowed claims, up from the 4.7 percent to 5.3 percent that had been proposed in the previous restructuring blueprint.
Liability releases included in earlier versions of the company's plan are unchanged, Samson said, with lenders providing concessions for the releases that protect high-value company tax considerations and that release claims for management fees to improve unsecured creditor recoveries.
"The committee believes the debtors' estates have valuable causes of action against the first-lien lenders, second-lien lenders and the sponsors," the disclosure said. "The debtors and other parties disagreed and opposed the committee's effort to pursue such claims, but the plan settles causes of action and such settlements provide significant recoveries."
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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