$BBEPQ, oil/energy company going through bankruptcy; could lose it all but worth very short term play. I got in @0.012 and still holding some.
Breitburn Asset Valuations At Heart Of Ch. 11 Plan Fight
https://www.law360.com/articles/998987/breitb...plan-fight
By Alex Wolf
Law360, New York (January 5, 2018, 8:36 PM EST) -- Shareholders of Breitburn Energy Partners LP told a New York bankruptcy court on Thursday that the company’s plan to sell its assets to a group of secured and unsecured creditors should not be approved because it undervalues the debtors’ assets by about $2 billion, to the detriment of equity holders.
There will be a showdown over the enterprise value of bankrupt oil and gas producer Breitburn at the company’s Chapter 11 plan confirmation hearing next week, as an official committee of Breitburn shareholders continues to argue that the company has capitulated to the will of a consortium of its debt holders and put forward a restructuring plan that drastically undervalues its assets and leaves no recovery for stockholders.
The plan would split Breitburn’s assets into two new entities, PermianCo and LegacyCo, which will end up being owned by two blocs of creditors in exchange for $775 million in cash and the conversion of debt to new equity. PermianCo will consist of Breitburn’s “crown jewel” assets in the Southwest’s sought-after Permian Basin, while LegacyCo comprises essentially everything else. Altogether, the deal values the company at around $1.6 billion, according to court documents.
Shareholders are up in arms over what the debtors believe the company is worth, saying that the estimate fails to account for “resurgent oil prices and the undeniably improved economic outlook for companies in the oil and gas industry.” The equity committee, which estimates Breitburn’s enterprise value at about $3.8 billion based on its earning capacity, alleges the company has failed to update its valuation in more than a year despite a more than 30 percent increase in oil prices.
What’s worse, the committee contends, is that Breitburn put its weight behind the current plan, which was orchestrated by its second-lien lenders and groups of unsecured bondholders, after previously calling certain features “unworkable.” The shareholders suggest that the company caved into the demands of its bondholders because the plan offers an incentive for company managers and provides a path to wrap up the nearly two-year-old case.
“Whether due to fatigue, brazen self-interest, or some of both, the debtors have filed a plan that this court cannot confirm for multiple, independent reasons,” the committee states in its brief.
According to the shareholders, the plan should be denied because of the way it was structured and because it provides plan proponents with recoveries in excess of their claims.
For their part, the debtors have challenged the equity committee’s asset valuations and the methodology used to arrive at the roughly $3.8 billion figure. Attorneys for Breitburn even sought to disqualify the committee’s experts based on a purported lack of relevant experience appraising assets and testifying to their worth.
“We’re talking about somebody who just doesn’t know how to do this,” Breitburn attorney Yehudah L. Buchweitz told the court at a hearing on Friday.
The motion to disqualify the experts ultimately failed, though, as U.S. Bankruptcy Judge Stuart M. Bernstein concluded that the committee has demonstrated that its experts have sufficient experience to testify about the oil and gas industry, and that the debtors could simply question the merits of those experts at trial next week.
Breitburn is a publicly traded energy holding and development partnership that filed for bankruptcy in May 2016. In its Chapter 11 petition, the company listed assets of around $4.7 billion and approximately $3.4 billion in total debt.
Breitburn is represented by Ray C. Schrock, Stephen Karotkin and Yehudah L. Buchweitz of Weil Gotshal & Manges LLP.
The equity committee is represented by Martin J. Bienenstock and Vincent Indelicato of Proskauer Rose LLP.
The second-lien group is represented by Christopher Marcus, Steven N. Serajeddini and Mark McKane of Kirkland & Ellis LLP.
The unsecured creditors committee is represented by Gregory A. Bray, Paul S. Aronzon, Haig M. Maghakian, Andrew M. Leblanc and Alexander B. Lees of Milbank Tweed Hadley & McCloy LLP.
The case is In re: Breitburn Energy Partners LP, case number 1:16-bk-11390, in the U.S. Bankruptcy Court for the Southern District of New York.
Breitburn Asset Valuations At Heart Of Ch. 11 Plan Fight
https://www.law360.com/articles/998987/breitb...plan-fight
By Alex Wolf
Law360, New York (January 5, 2018, 8:36 PM EST) -- Shareholders of Breitburn Energy Partners LP told a New York bankruptcy court on Thursday that the company’s plan to sell its assets to a group of secured and unsecured creditors should not be approved because it undervalues the debtors’ assets by about $2 billion, to the detriment of equity holders.
There will be a showdown over the enterprise value of bankrupt oil and gas producer Breitburn at the company’s Chapter 11 plan confirmation hearing next week, as an official committee of Breitburn shareholders continues to argue that the company has capitulated to the will of a consortium of its debt holders and put forward a restructuring plan that drastically undervalues its assets and leaves no recovery for stockholders.
The plan would split Breitburn’s assets into two new entities, PermianCo and LegacyCo, which will end up being owned by two blocs of creditors in exchange for $775 million in cash and the conversion of debt to new equity. PermianCo will consist of Breitburn’s “crown jewel” assets in the Southwest’s sought-after Permian Basin, while LegacyCo comprises essentially everything else. Altogether, the deal values the company at around $1.6 billion, according to court documents.
Shareholders are up in arms over what the debtors believe the company is worth, saying that the estimate fails to account for “resurgent oil prices and the undeniably improved economic outlook for companies in the oil and gas industry.” The equity committee, which estimates Breitburn’s enterprise value at about $3.8 billion based on its earning capacity, alleges the company has failed to update its valuation in more than a year despite a more than 30 percent increase in oil prices.
What’s worse, the committee contends, is that Breitburn put its weight behind the current plan, which was orchestrated by its second-lien lenders and groups of unsecured bondholders, after previously calling certain features “unworkable.” The shareholders suggest that the company caved into the demands of its bondholders because the plan offers an incentive for company managers and provides a path to wrap up the nearly two-year-old case.
“Whether due to fatigue, brazen self-interest, or some of both, the debtors have filed a plan that this court cannot confirm for multiple, independent reasons,” the committee states in its brief.
According to the shareholders, the plan should be denied because of the way it was structured and because it provides plan proponents with recoveries in excess of their claims.
For their part, the debtors have challenged the equity committee’s asset valuations and the methodology used to arrive at the roughly $3.8 billion figure. Attorneys for Breitburn even sought to disqualify the committee’s experts based on a purported lack of relevant experience appraising assets and testifying to their worth.
“We’re talking about somebody who just doesn’t know how to do this,” Breitburn attorney Yehudah L. Buchweitz told the court at a hearing on Friday.
The motion to disqualify the experts ultimately failed, though, as U.S. Bankruptcy Judge Stuart M. Bernstein concluded that the committee has demonstrated that its experts have sufficient experience to testify about the oil and gas industry, and that the debtors could simply question the merits of those experts at trial next week.
Breitburn is a publicly traded energy holding and development partnership that filed for bankruptcy in May 2016. In its Chapter 11 petition, the company listed assets of around $4.7 billion and approximately $3.4 billion in total debt.
Breitburn is represented by Ray C. Schrock, Stephen Karotkin and Yehudah L. Buchweitz of Weil Gotshal & Manges LLP.
The equity committee is represented by Martin J. Bienenstock and Vincent Indelicato of Proskauer Rose LLP.
The second-lien group is represented by Christopher Marcus, Steven N. Serajeddini and Mark McKane of Kirkland & Ellis LLP.
The unsecured creditors committee is represented by Gregory A. Bray, Paul S. Aronzon, Haig M. Maghakian, Andrew M. Leblanc and Alexander B. Lees of Milbank Tweed Hadley & McCloy LLP.
The case is In re: Breitburn Energy Partners LP, case number 1:16-bk-11390, in the U.S. Bankruptcy Court for the Southern District of New York.
