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Breitburn Energy Partners Objection Filed

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Breitburn Energy Partners’ official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion to extend its exclusivity periods.

The objection explains, “The proper exercise of fiduciary duties here is especially important to the Debtors’ unsecured creditors, who are the fulcrum class and who therefore will be most directly affected by decisions the board and management make in pursuing – or declining to pursue – any particular restructuring option. It is therefore imperative that the Debtors fulfill their obligation to explore all reasonable transaction structures and engage in a dialogue with creditors, including the Committee, to identify which restructuring path will produce the most value for stakeholders.”

The objection continues, “Yet that is not how these cases have proceeded to date. Instead, the Debtors appear to have filed these cases with a preconceived view of the outcome, and to be using the chapter 11 process to force their desired result upon creditors….The Committee contends, and has expressed its view to the Debtors, that the proceeds of the sale of the Midland Basin Acreage, combined with the proceeds from liquidation of the Debtors’ hedge portfolio, could be used to repay and otherwise reinstate secured creditors. But the Debtors have thus far rejected this approach out of hand, refusing even to conduct a market test of this valuable asset….The Debtors further have improperly delegated to the second-lien noteholders the task of proposing a restructuring term sheet to the Committee, rather than performing this key responsibility themselves. The abdication by the Debtors and the directors of their responsibilities in this regard is inconsistent with their fiduciary duties…Moreover, the Debtors’ continued pursuit of a development-focused approach may result in a plan that fails to satisfy the ‘best interests of creditors’ test and that will accordingly be unconfirmable.”

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The post Breitburn Energy Partners Objection Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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