American Eagle Energy filed with the U.S. Bankruptcy Court Second Amended Joint Chapter 11 Plan of Liquidation and related Disclosure Statement.
According to the disclosure statement, “The overall purpose of the Plan is to liquidate the Debtors’ assets and liabilities in a manner designed to maximize recoveries to all creditors. The Debtors believe the Plan is reasonably calculated to lead to the best possible outcome for all creditors in the shortest amount of time and is preferable to all other alternatives….The Plan designates eight (8) separate classes of Claims and Equity Interests. The Plan contains one (1) Class of Unsecured Claims….The provisions of the Plan governing, among other things: (i) the payment of allowed fees and expenses incurred by the Creditors’ Committee Professionals; (ii) the payment of the Unsecured Creditor Payment; and (iii) the establishment of the Liquidation Trust have been fully negotiated by and among the Debtors, Ad Hoc Group, and the Committee. The Committee has agreed to withdraw the Committee Conversion Motion and support confirmation of the Plan….On the Effective Date of the Plan, the Liquidating Trust Assets will be transferred to the Liquidating Trust. The Liquidation Trust will liquidate such assets in an orderly fashion for the benefit of the Unsecured Creditors (Class 7). The Plan also provides that the holders of Allowed Administrative Claims and Allowed Priority Tax Claims will be paid in full on the Effective Date or the date that such Claims become Allowed Claims. Upon the Effective Date, existing equity in the Debtors will be cancelled. Section 4.2 of the Plan incorporates a settlement offer to the holders of Outstanding Well Lien Claims. Sections 4.3 – 4.5 of the Plan incorporate the terms of settlements that have been agreed upon by the Debtors, Indenture Trustee, and Ad Hoc Group, on the one hand, and the claimant(s) whose claims are treated under Sections 4.3 – 4.5, respectively, on the other hand. All Claims against the Debtors shall be classified and treated pursuant to the terms of the Plan.”
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