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Vanguard Natural Resources Objection Filed, Seal Approval Sought

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Vanguard Natural Resources’ ad hoc equity committee filed with the U.S. Bankruptcy Court a redacted preliminary objection to the Debtor’s disclosure statement, and request for valuation hearing.

The committee asserts, “From the inception of these cases, the Debtors’ management has represented that the value of Debtors is so low that the Equity Holders must not only lose their investments, but also must be made to bear the full taxation brunt of cancellation of debt income (‘CODI’) – the impact of which will be in the tens of millions of dollars….Without the Debtors explanation of the valuation methodologies used and the inputs for those valuation methods, including what discount rates were used, what prices were used, and what other factors were taken into account, it is impossible for a hypothetical investor to make an informed decision about how the Debtors arrived at the $1.625 billion figure. In addition, a hypothetical investor would want to know: (i) what specifically changed between the Debtors’ January 2017 Management Presentation and the execution of the RSA; and (ii) how the Debtors are going to explain the differences between the Debtors’ value and the substantially higher Huron Valuation….It is premature to move forward with what Management has proposed in the way of the RSA-constructed Plan and Disclosure Statement. The Debtors have sufficient cash, and the only timing constraint imposed on the Debtors was manufactured by Management and certain bondholders in the arbitrary deadlines imbedded in the RSA. The cost of the proposed Plan to the Equity Holders is too high not to take a pause and ensure that the Debtors are being reorganized in a thoughtful manner.” Subsequently, the ad hoc equity creditor’s committee filed with the Court a separate motion to file under seal certain confidential information related to the above objection. The seal motion explains, “Because the parties have not reached an agreement on the terms and conditions of the protective order and because the Equity Committee’s financial advisor is a party to an overly broad and highly restrictive nondisclosure agreement, the Equity Committee has redacted certain information out of an abundance of caution….Certain information included in the Preliminary Objection may be based on confidential information provided by the Debtors to the Equity Committee’s financial advisor through informal discovery.”

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The post Vanguard Natural Resources Objection Filed, Seal Approval Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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