Sundance Energy
FILING ALERT: Sundance Energy Inc. Files Chapter 11 in the Southern District of Texas to Pursue Prepackaged Plan
Tue 03/09/2021 23:05 PM
Relevant Documents:
Voluntary Petition
Press Release
Joint Administration Motion
Sundance Energy, a Denver-based onshore independent oil and natural gas company focused on the development of large, repeatable resource plays in North America, filed for chapter 11 protection tonight in the Bankruptcy Court for the Southern District of Texas, along with several affiliates. The company reports $450.3 million in assets and $428.8 million in liabilities as of Sept. 30, 2020. For access to the relevant documents above as well as our First Day by Reorg team's coverage of all U.S. chapter 11 cases filed since 2012 with over $10 million in liabilities including the Sundance Energy chapter 11 filing Request a Trial here.
According to a press release issued in connection with the bankruptcy filing, the company intends to propose a prepackaged plan of reorganization premised on a restructuring support agreement entered into on March 9 with (i) its prepetition RBL agent, (ii) holders of 100% of the outstanding principal amount of revolving loans under the prepetition RBL, (iii) its prepetition term loan agent and (iv) holders of 100% of the outstanding principal amount of term loans under the debtors’ prepetition term loan facility. The RSA and prepackaged plan contemplate a debt-for-equity exchange that would eliminate over $250 million of funded debt obligations from the company’s balance sheet.
Implementation of the plan would strengthen Sundance’s financial structure, “allowing it to focus on core competencies without the burden of servicing significant debt levels,” according to the press release. The release adds that “all operations will continue as usual without interruption and the Chapter 11 process is expected to conclude in approximately 60 days.”
“With the significant support of its lenders, implementation of the Prepackaged Plan will enable the Company to quickly and efficiently recapitalize its balance sheet and reorganize as a private entity with no material impact on the majority of its creditors,” the release continues. Under the proposed plan, existing equity interests would be cancelled on the effective date and holders of existing equity interests “are not expected to receive any consideration or distributions on account of such interests,” notes the press release. In addition, the prepackaged plan contemplates that unsecured trade creditors would be paid in full.
The company has also secured commitments from certain of its term loan lenders for “at least” $45 million in DIP financing, which, along with normal operating cash flows and the consensual use of cash collateral, would fund normal course operations and reorganization expenses, the release continues.
The company say that “upon emergence, its recapitalized balance sheet will include (i) $137.5 million of funded indebtedness comprising a senior secured reserve-based revolving credit facility, a senior secured second out term loan, and, if necessary, a senior secured third out term loan, in each case provided by the existing RBL Facility lenders and (ii) new common equity interests issued in exchange for DIP financing claims and Term Loan claims, subject to dilution by new common equity interests granted under a new management incentive plan.”
The first day hearing is scheduled for Wednesday, March 10, at 3 p.m. ET.
Sundance Energy’s equityholders include:
The debtors’ three largest unsecured creditors are listed below:
The debtors are represented by Latham & Watkins in New York and Hunton Andrews Kurth in Houston as co-counsel, FTI Consulting as financial advisor and Miller Buckfire and its affiliate Stifel Nicolaus as investment bankers. Prime Clerk is the claims agent. The case number is 21-30882. The case has been assigned to Judge David R. Jones.
Reorg First Day will provide a full summary once the first day briefing is complete.
Voluntary Petition
Press Release
Joint Administration Motion
Sundance Energy, a Denver-based onshore independent oil and natural gas company focused on the development of large, repeatable resource plays in North America, filed for chapter 11 protection tonight in the Bankruptcy Court for the Southern District of Texas, along with several affiliates. The company reports $450.3 million in assets and $428.8 million in liabilities as of Sept. 30, 2020. For access to the relevant documents above as well as our First Day by Reorg team's coverage of all U.S. chapter 11 cases filed since 2012 with over $10 million in liabilities including the Sundance Energy chapter 11 filing Request a Trial here.
According to a press release issued in connection with the bankruptcy filing, the company intends to propose a prepackaged plan of reorganization premised on a restructuring support agreement entered into on March 9 with (i) its prepetition RBL agent, (ii) holders of 100% of the outstanding principal amount of revolving loans under the prepetition RBL, (iii) its prepetition term loan agent and (iv) holders of 100% of the outstanding principal amount of term loans under the debtors’ prepetition term loan facility. The RSA and prepackaged plan contemplate a debt-for-equity exchange that would eliminate over $250 million of funded debt obligations from the company’s balance sheet.
Implementation of the plan would strengthen Sundance’s financial structure, “allowing it to focus on core competencies without the burden of servicing significant debt levels,” according to the press release. The release adds that “all operations will continue as usual without interruption and the Chapter 11 process is expected to conclude in approximately 60 days.”
“With the significant support of its lenders, implementation of the Prepackaged Plan will enable the Company to quickly and efficiently recapitalize its balance sheet and reorganize as a private entity with no material impact on the majority of its creditors,” the release continues. Under the proposed plan, existing equity interests would be cancelled on the effective date and holders of existing equity interests “are not expected to receive any consideration or distributions on account of such interests,” notes the press release. In addition, the prepackaged plan contemplates that unsecured trade creditors would be paid in full.
The company has also secured commitments from certain of its term loan lenders for “at least” $45 million in DIP financing, which, along with normal operating cash flows and the consensual use of cash collateral, would fund normal course operations and reorganization expenses, the release continues.
The company say that “upon emergence, its recapitalized balance sheet will include (i) $137.5 million of funded indebtedness comprising a senior secured reserve-based revolving credit facility, a senior secured second out term loan, and, if necessary, a senior secured third out term loan, in each case provided by the existing RBL Facility lenders and (ii) new common equity interests issued in exchange for DIP financing claims and Term Loan claims, subject to dilution by new common equity interests granted under a new management incentive plan.”
The first day hearing is scheduled for Wednesday, March 10, at 3 p.m. ET.
Sundance Energy’s equityholders include:
The debtors’ three largest unsecured creditors are listed below:
The debtors are represented by Latham & Watkins in New York and Hunton Andrews Kurth in Houston as co-counsel, FTI Consulting as financial advisor and Miller Buckfire and its affiliate Stifel Nicolaus as investment bankers. Prime Clerk is the claims agent. The case number is 21-30882. The case has been assigned to Judge David R. Jones.
Reorg First Day will provide a full summary once the first day briefing is complete.
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