Multiple parties -including Rooster Energy’s official committee of unsecured creditors, United States Specialty Insurance Company, Aspen American Insurance Company and ConocoPhillips Company – filed with the U.S. Bankruptcy Court separate objections to Rooster Energy’s Disclosure Statement and Plan.
The unsecured creditors’ committee asserts, “The Rooster Committee has been engaged in discussions with the Debtors, Chet Morrison and his related entities, and the Administrative Agent in connection with a resolution of the Rooster Committee’s objections to the Rooster Disclosure Statement and MWS/Cochon Disclosure Statement and the Rooster Plan and MWS/Cochon Plan While significant progress has been made, the parties have not yet reached resolution. As a result, the Rooster Committee files this Objection….The Debtors fail to include sufficient information regarding claims and causes of action proposed to be released under the Plans for creditors to evaluate the prudence of those releases….The Rooster Plan uses coercion by implementing a ‘death-trap’ provision which threatens to allow the noteholders’ deficiency claim (in excess of $50 million) to dilute the general unsecured claim pool unless holders of unsecured claims vote to accept the Rooster Plan.”
In addition, “The releases provided to the Released Parties and Administrative Agent in the Rooster Plan, including Chet Morrison and his related entities and the Debtors’ directors and officers, fails to meet the standards in the Fifth Circuit. Under the ‘death-trap’ scenario, holders of unsecured claims will be left with no recovery, which is potentially a worse position than if the Rooster Debtors’ estates were liquidated in chapter 7. The Rooster Debtors’ Liquidation Analysis states that there will be no recovery to unsecured creditors in a liquidation scenario. However, it fails to include the value of claims against certain directors and officers and the $5 million insurance policy. As a result, based on the Committee’s calculation, even assuming the increased claims pool, recoveries to general unsecured creditors could be up to 5%.”
Read more Rooster Energy bankruptcy news.
The post Rooster Energy Bankruptcy Objections Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.