American Eagle wins final approval to use cash collateral of lenders

By Kali Hays

New York, July 13 – American Eagle Energy Corp. received final authorization to use the cash collateral of its pre-bankruptcy lenders on Monday with an order form the U.S. Bankruptcy Court for the District of Colorado.

The collateral use order is set to expire on Oct. 2 unless extended by the lender parties.

As previously reported, the company had been operating with interim use to collateral provided by holders of its 11% senior secured notes due 2019 since early May, but had been denied final approval twice as it was unable to reach agreed terms with its official committee of unsecured creditors and an informal group of noteholders.

According to the order, American Eagle will use the collateral to fund its operations in line with a weekly budget approved by the lenders.

Terms of the agreement require the company to keep cash on hand of at least $3.7 million. A default will be triggered if cash funds dip below that amount, automatically terminating American Eagle’s collateral use.

American Eagle Energy is a Littleton, Colo.-based independent oil and gas acquisition, exploration and development company. The company filed for bankruptcy on May 8 under Chapter 11 case number 15-15073.

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