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Saratoga Resources Conversion Sought

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According to the U.S. Bankruptcy Court docket, Energy Reserves Group II filed a motion to convert Saratoga Resouces’ Chapter 11 cases to liquidation under Chapter 7.

The motion explains, “Considering the Debtors’ Schedules, balance sheet and cash flow reports, the Debtors are clearly insolvent…as of August 3, 2015, when the price of oil was approximately $45 per barrel, the Debtors reported more than $200 million of liabilities and approximately $98 million of assets. Since that time, the price of oil has further fallen.”

The motion continues, “The Debtors have been in continuing default of their interest payment obligations on the Second Lien Notes since December 31, 2014. Further, the trading prices for the Debtors’ equity and secured debt reflect the market’s view that the Debtors are hopelessly insolvent. The cash flow generated by the Debtors is grossly insufficient to satisfy the Debtors’ administrative obligations; much less the Debtors’ secured debt obligations. To the extent they are not already, the risk is high that the Debtors will soon become administratively insolvent. It is indisputable that the Debtors’ equity holders will not receive any material distribution and that the holders of the Second Lien Notes will be significantly impaired. The Debtors have not proposed a plan or disclosure statement, nor have they indicated when they could do so. All of these facts lead to only one feasible conclusion: these cases must be converted to chapter 7.” Read more energy bankruptcy news.

 

The post Saratoga Resources Conversion Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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