April 15, 2019 – The Debtors (i) filed prepackaged Plan and a related Disclosure Statement [Docket Nos. 20 and 19, respectively] and (ii) scheduled a May 6, 2019 combined hearing to approve the Disclosure Statement and confirm the Plan [Docket No. 21].
In a press release announcing the filing, the debtors provided the following detail as to the bankruptcy and creditor support, "If approved, [the Plan] will fully equitize the Company’s outstanding prepetition funded debt, authorize incurrence of a fully committed exit facility, and satisfy all trade, customer, employee, and royalty claims in full in the ordinary course of business and without change or interruption to its normal payments process….As previously announced, on April 3, 2019, Jones Energy commenced the solicitation of votes to accept or reject the Plan. As of the filing, the Company has received votes from holders of approximately 92% in principal of the First Lien Notes and approximately 83% in principal of the Unsecured Notes, all of whom voted to accept the Plan. As a result, Jones Energy has sufficient acceptances to carry two of the three voting classes under the Plan and, therefore, expects to meet the requirements for confirmation of the Plan….With overwhelming stakeholder support for the Plan, the Court approved an expedited chapter 11 timeline. The Court has set a deadline to vote to accept the Plan on May 1, 2019, by 4 p.m. CT. The Company expects to emerge from bankruptcy no later than fourteen days following confirmation of the Plan."
The Disclosure Statement adds, “The Restructuring Support Agreement and Plan contemplate a swift restructuring by which the Debtors will (a) equitize all $1.009 billion of the Company’s prepetition funded debt and (b) obtain a new exit credit facility in an aggregate principal amount of up to $20.0 million (the “Committed Exit Facility”), with the option to seek alternative financing with higher borrowing limits. The Plan also contemplates reinstating or paying in full all trade claims against the Debtors in the ordinary course of business. Finally, although the Debtors believe their total enterprise value does not support a recovery to Unsecured Noteholders, the Plan contemplates an opportunity for a meaningful recovery to the Unsecured Noteholders from the First Lien Notes’ collateral that they likely would not otherwise be entitled to receive. The proposed restructuring transactions are value-maximizing for the Company’s stakeholders. A right-sized capital structure will allow the Debtors to develop their assets and implement a growth-oriented drilling program. In addition, the compromises and settlements embodied in the Restructuring Support Agreement, and to be implemented pursuant to the Plan, preserve value by enabling the Debtors to avoid protracted, value-destructive litigation over potential recoveries and other causes of action that could delay the Debtors’ emergence from chapter 11. As of the date of this Disclosure Statement, holders of approximately 84% in principal of the First Lien Notes and approximately 84% in principal of the Unsecured Notes have signed onto the Restructuring Support Agreement, representing nearly $900 million of the Company’s just over $1.0 billion of funded debt.”
The following is a summary of classes, claims, voting rights and expected recoveries (defined terms are as defined in the Disclosure Statement):
- Class 1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 2 (“Other Priority Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 3 (“Hedge Claims / RBL Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 4 (“First Lien Notes Claims”) is impaired and entitled to vote on the Plan. The estimated aggregate amount of claims is $529,828,000 and the estimated recovery is 62.5%.
- Class 5 (“Unsecured Notes Claims”) is impaired and entitled to vote on the Plan. The estimated aggregate amount of claims is $582,125,000 and the estimated recovery is 4.3%.
- Class 6 (“General Unsecured Claims against Debtors other than JEI and JEI, LLC”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 7 (“General Unsecured Claims against JEI and/or JEI, LLC”) is impaired and entitled to vote on the Plan. The estimated aggregate amount of claims is $50,200,000 and the estimated recovery is 0%.
- Class 8 (“Intercompany Claims”) is unimpaired/impaired, deemed to accept or reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is N/A and the estimated recovery is 0%.
- Class 9 (“Existing Preferred Equity Interests”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is N/A and the estimated recovery is 0%.
- Class 10 (“Existing Common Equity Interests”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is N/A and the estimated recovery is 0%.
- Class 11 (“Intercompany Interests”) is unimpaired/impaired, deemed to accept or reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is N/A and the estimated recovery is 100%.
The following exhibits are attached to the Disclosure Statement:
- Exhibit A: Plan of Reorganization
- Exhibit B: Restructuring Support Agreement
- Exhibit C: Corporate Organization Chart
- Exhibit D: Liquidation Analysis
- Exhibit E: Financial Projections
- Exhibit F: Valuation Analysis
Approved Key Dates:
- Voting Deadline and Objection Deadline: May 1, 2019
- Combined Hearing (Disclosure Statement approval and Plan confirmation): May 6, 2019
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The post Jones Energy – Files Plan and Disclosure Statement for $1.0bn Prepackaged Restructuring, Intends to Confirm Plan in Three Weeks and Emerge in Five appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.