Dune Energy creditors object to Chapter 11 plan’s distribution scheme

By Mark Reccek

Bethlehem, Pa., Sept. 11 – Dune Energy, Inc.’s official committee of unsecured creditors objected to the company’s Chapter 11 plan and disclosure statement, according to a Thursday filing with the U.S. Bankruptcy Court for the Western District of Texas.

According to the filing, the committee argues the plan unfairly requires deferred professional fees, as well as other potential expenses from net avoidance action recoveries, which disproportionately impact second-lien lenders.

The committee also said the plan provides insufficient funds for the plan trust, requires the deferral of committee professional fees in violation of the Bankruptcy Code and fails to provide sufficient reserves for administration claims.

As previously reported, the plan implements a distribution scheme derived from the previously reported sale. In addition, a plan trust will be created to provide “meaningful recoveries” to creditors.

Dune previously said the plan also calls for the wind down of the debtors.

Dune closed on the sale of most of its assets on July 27. Trimont Energy (NOW), LLC purchased the company’s Garden Island Bay field and Bateman Lake field for $1 and assumed real estate tax liabilities. Also, White Marlin Oil & Gas Co. purchased most of the company’s remaining oil and gas fields for $19 million.

Treatment of creditors includes the following:

• Priority claims will be paid in full in cash;

• Holders of secured tax claims and other secured claims will either be paid in full in cash or receive the remaining assets securing the claim;

• First-lien secured lenders will receive net sale proceeds, all remaining cash on hand and net proceeds from the liquidation of remaining assets;

• Holders of second-lien loan claims and general unsecured claims will receive a beneficial interest in the plan trust; and

• Holders of equity interests and subordinated claims will receive no distribution.

Dune is a Houston-based energy company that filed for bankruptcy on March 9, 2015. The Chapter 11 case number is 15-10336.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.