Breitburn Energy Partners’ statutory committee of equity security holders filed with the U.S. Bankruptcy Court a motion to reopen the record of the confirmation hearing to include limited, new evidence.
The motion explains, “Here, the Equity Committee asks the Court to reopen the record to include the Lime Rock Stalking Horse Offer, which first became available to the Equity Committee mere hours before the deadline for the parties to file their proposed findings of fact and conclusions of law….The failure to submit this new evidence did not result from the Equity Committee’s lack of diligence (since the evidence did not exist during the Confirmation Hearing) and, because the Debtors received the evidence at the same time and in the same manner as the Equity Committee, there is no reason to believe the Debtors would be prejudiced by including the Lime Rock Stalking Horse Offer in the record….In fact, the Equity Committee assumes the Debtors themselves will desire to explain how their Board considered the Lime Rock Stalking Horse Offer and the basis for any determination that the current Plan, which likely offers Second Lien Noteholders more than 100% of their claims, pays some unsecured creditors zero and others four cents, extinguishes equity for no consideration, and poses a very real risk that common unitholders will receive a $525 million tax liability, remains the superior, ‘higher and better’ alternative, such that the Debtors determined they need not exercise their fiduciary out and, at the very least, explore the potential for a value-maximizing transaction with Lime Rock.”
In addition, “Moreover, because the Lime Rock Stalking Horse Offer does not allocate its opening, stalking horse bid of $1.8 billion for all of the Debtors’ assets, the Debtors should, as fiduciaries, also want to request that information and compare it to the recent Diamondback Energy offer for the Permian assets….For the foregoing reasons, the Court should reopen the record of the Confirmation Hearing and consider the Lime Rock Stalking Horse Offer in connection with the Equity Committee’s Objection.”
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