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LINN Energy Backstop Agreement Approval Sought

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Linn Acquisition Company (LAC) and Berry Petroleum Company filed with the U.S. Bankruptcy Court a motion for entry of an order (i) approving (a) entry into a backstop agreement, (b) payment of related fees and expenses and (c) rights offerings procedures and related forms and (ii) granting related relief.

The motion explains, “The restructuring is premised on a $300 million rights offering through which substantially all of members of the Berry Noteholder Group or their affiliated funds (the ‘Commitment Parties’) will backstop the purchase of new shares of convertible preferred stock (the ‘New Preferred Stock’) in reorganized Berry.”

The motion continues, “This new-money investment will be consummated through two rights offerings: (a) the first tranche rights offering for $60 million of New Preferred Stock (the ‘First Tranche Rights Offering’), which will be open solely to funds affiliated with Oaktree Capital Management, L.P. and/or Benefit Street Partners, who are the members of the Berry Noteholder Group that led the negotiations with the Berry Debtors; and (b) the second tranche rights offering for $240 million of New Preferred Stock (the ‘Second Tranche Rights Offering,’ and together with the First Tranche Rights Offering, the ‘Rights Offerings’), which will be open to all holders of the Berry Notes. The proceeds of the Rights Offerings will be used to pay down a considerable portion of the Berry Lender Claims and provide working capital for reorganized Berry….The Rights Offerings will be collectively implemented through a plan of reorganization (the ‘Berry Plan’), pursuant to which Berry will emerge from chapter 11 as a new standalone entity owned by the holders of Berry unsecured claims and the participants in the Rights Offerings.”

In addition, “In connection with the Berry Plan, and subject to further negotiation and finalization of appropriate documentation, certain of the Berry Lenders will provide a $550 million exit facility (the ‘Berry Exit Facility’) and receive the paydown facilitated by the Rights Offerings. In exchange for their claims, the holders of Berry Notes will receive equity in reorganized Berry and will have the opportunity to participate in the Rights Offerings.”

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The post LINN Energy Backstop Agreement Approval Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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