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LINN Energy Objection Filed

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The ad hoc committee of Berry senior noteholders (the ad hoc committee), consisting of the holders of approximately 80% of the principal face amount of nearly $834 million in 6.75% senior notes due 2020 and 6.375% senior notes due 2022, collectively, the Berry Notes issued by debtor Berry Petroleum Company filed with the U.S. Bankruptcy Court an objection to LINN Energy’s motion to extend their exclusive periods to file a chapter 11 plan and solicit acceptances thereof.

The objection asserts, “Berry’s exclusive period to file a plan will expire on September 8—as it should. The Ad Hoc Committee has attempted to negotiate a plan with the Debtors and Berry’s First Lien Lenders, but those efforts have been ignored. The Ad Hoc Committee would welcome a prompt negotiated solution to Berry’s case, but that would require negotiations. There is no justification for the continued delay of Berry’s emergence from chapter 11 as a profitable, standalone enterprise, separated from the complexities and significant expense of Linn’s chapter 11 cases. In order for Berry’s case to move forward, the Court should permit the Ad Hoc Committee to propose a plan that will allow for Berry to emerge as a going concern, let the other constituents decide whether to support or oppose the plan, and have this Court determine whether the plan satisfies the Bankruptcy Code’s requirements for confirmation….Berry’s unsecured creditors bear the entire cost of the continued delay. Berry continues to pay to Linn tens of millions of dollars of Management Fees to subsidize Linn’s overhead, which Management Fees are forecast to be $73 million in 2016. Moreover, 30 percent of administrative expenses of the chapter 11 cases (including Linn’s) are locked and loaded to be allocated to Berry’s estate….Berry is forecast to pay $55 million in administrative expenses for 2016….The unsecured creditors have been fighting for Berry to reorganize, while the Debtors are running a protracted marketing process that threatens to break Berry into pieces, destroy the going concern, and in any event locking in unsecured creditor recoveries at the current depressed market values.”

More oil and natural gas section bankruptcy information.

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