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Energy XXI Objection Filed

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Energy XXI’s official committee of equity security holders filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion for an exclusivity extension.

The objection explains, “The Motion is inherently contradictory. The Debtors have already filed a plan and disclosure statement and are set for confirmation 152 days from the Petition Date. According to the Debtors, they must exit bankruptcy quickly in view of the state of the hurricane season. Yet, the Motion asks for an extension of time through December 10, 2016. The Debtors cannot have it both ways. If they really need to exit quickly, they should be presenting a consensual plan supported by the creditors. They are doing nothing of the kind….From an economic standpoint, the plan is nothing more than a disguised foreclosure sale to the second lien holders who will become the owners of the Debtors to the exclusion of all other interested parties in the case. Certainly, a bankruptcy sale is one method of exiting bankruptcy.”

The objection continues, “But in virtually all cases, such sales are accomplished according to Court ordered bid procedures designed to adequately market the property and bring the best price possible. HERE, THE DEBTORS ARE NOT MARKETING THE PROPERTY. In fact, the Debtors are prohibited from soliciting proposals or offers by the terms of the Restructuring Support Agreement (‘RSA’)….As a result, the Equity Committee is exploring the possibility of filing its own plan or even a joint plan with the unsecured creditors which may propose new management and new financing once exclusivity has expired.”

Read more Energy XXI bankruptcy news.

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