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Ultra Petroleum Bankruptcy Trustee Sought

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Ultra Petroleum’s ad hoc committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion for an order (i) appointing a Chapter 11 trustee or (ii) in the alternative, appointing independent directors to the Company’s board.

The motion explains, “The Debtors have chosen this path despite their belief that they are solvent. In sum, the Debtors are using these chapter 11 cases for the benefit of their equity holders and structurally junior creditors at the parent level to the detriment of their senior creditors and other parties in interest, who have been completely excluded from the plan negotiation process. Moreover, the Debtors are operating with blatant conflicts of interest that have been brought to the fore by the terms of the PSA and the Plan.”

In addition, “At the Debtors’ assumed valuation of $6 billion, management stands to receive its pro rata share of 41% of the pro forma new equity issued under the Plan on account of its Holdco equity ownership (as well as subscription rights to participate in a rights offering for an additional 25% of the new equity) and nearly $292.5 million under a management incentive plan (the ‘MIP’) Opco’s senior creditors, on the other hand, are being crammed down by an ostensibly highly solvent company. Messrs. Watford and Shaw appear committed to supporting a restructuring that reallocates value from Opco (and the Debtors’ senior most creditors) to Holdco, and into their pockets. This self-dealing is highly inappropriate and should not be countenanced….Current management has been given the time and opportunity to ‘do the right thing’ and they have failed to do so in every instance. Unfortunately, the terms of the PSA and the Plan crystalize the concerns expressed by the Senior Creditor Committee early on in these cases.”

The Court schedule a January 19, 2017 hearing on the motion.

Read more oil & gas bankruptcy news.

The post Ultra Petroleum Bankruptcy Trustee Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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