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Delta Petroleum sets asset sale procedures without stalking horse bid
By Caroline Salls
Pittsburgh, Dec. 28 - Delta Petroleum Corp. requested court approval of the bid procedures for the proposed sale of substantially all of its assets, according to a Dec. 28 filing with the U.S. Bankruptcy Court for the District of Delaware.
The company said it did not reach a stalking horse bid agreement with any interested purchasers, but the bid procedures allow Delta to enter a stalking horse agreement anytime before the bid deadline.
If a stalking horse bid is selected, Delta said it would pay that bidder a break-up fee and expense reimbursement of up to 3% of the proposed purchase price if it is not the high bidder at auction.
Bids are due by 5 p.m. ET on March 13 and must include a 5% cash deposit, according to court documents.
The auction will be held on March 20. The sale hearing is scheduled for March 22.
The initial overbid must be for at least $2 million more than the baseline bid, and subsequent bids must be made in increments of at least $2 million, the filing said.
According to the motion, at least one of the company's constituents believes that an alternative transaction could bring a larger recovery for stakeholders.
Delta said the proposed sale process is not designed to exclude any proposals for alternative transactions, and the company will consider any proposal that clearly offers stakeholders better terms and a higher potential recovery.
The company has requested a Jan. 11 hearing on the bid procedures.
Delta Petroleum, a Denver-based oil and gas exploration and development company, filed for bankruptcy on Dec. 15. Its Chapter 11 case number is 11-14006.
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