Paragon Offshore filed with the U.S. Bankruptcy Court an objection to the motion of shareholder appellants Michael Hammersley and Marcel de Groot for stay of the June 7, 2017 Court order confirming the Company’s Fifth Joint Chapter 11 Plan.
The objection asserts, “The Appellants are not entitled to a stay pending appeal of the Confirmation Order under applicable law and the facts of this case. The burden is on the Appellants and they have not shown a reasonable chance of success on the merits of their appeal where, given their day in court, the Appellants failed to present any evidence to controvert the record made by the Debtors. Additionally, the Appellants cannot establish that they will suffer irreparable harm absent a stay because their alleged harm is purely economic, speculative, and remote. Moreover, the remaining two factors – the balance of harms and public interest – strongly favor denial of the Stay Motion.”
In addition, “Even if the Court were inclined to grant a stay, applicable law provides that the stay be conditioned upon the immediate posting of a bond sufficient to protect the Debtors and their stakeholders from irreparable injury. The Appellants should be required to post a bond of approximately $500 million, which is the sum of (i) the difference of the midpoint value of the Enterprise Value and the midpoint value of the Liquidation Value (i.e. approximately $445 million) and (ii) the incremental costs of professional fees incurred over an eighteen month stay period (i.e. approximately $55 million).” The Court subsequently denied the motion for stay of the Plan confirmation order.
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