Green Field examiner: Shell releases justified, some Moreno ones not

By Caroline Salls

Pittsburgh, April 4 - Green Field Energy Services, Inc.'s court-appointed examiner said the company's current plan of reorganization is justified in granting releases of valuable claims against some but not all parties that are scheduled to receive a release, according to a redacted version of the examiner's report filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

Examiner Steven A. Felsenthal said the value being contributed to restructuring support agreement parties under the plan does not justify the release of avoidance claims against Michael B. Moreno and affiliated entities.

The examiner said Moreno and the affiliated entities are not making any payments to the estate to resolve or settle their avoidance claims, nor are they withdrawing those claims under the plan.

However, Moreno and the affiliated entities will receive equity in a new company under the plan.

As a result, Felsenthal said he cannot find a basis to contribute part of the $32.73 million in consideration being provided by noteholders for releases to support Moreno avoidance action releases.

In addition, despite an argument from Green Field's official committee of unsecured creditors, Felsenthal did not find issues with Shell's dealings with the company. The examiner said the $5 million Shell stands to receive under the plan should not be subordinated.

According to the report, Green Field Energy and Swepi, Inc., which are referred to as Shell in the company's plan and the examiner's report, agreed to withdraw an $80 million to $111 million claim and contribute the value of interests in the proceeds of shared collateral to the Green Field estate.

As a result, the examiner said Shell provided valuable consideration for the release it will receive.

As previously reported, the examiner was ordered to investigate whether the company's estates hold valuable claims or causes of action against any of the parties that would receive a release if the Chapter 11 plan described in Green Field's restructuring support agreement is confirmed.

The examiner was also ordered to investigate whether the value being contributed to the support agreement parties justifies those releases.

The examiner order was later modified to reflect the company's filing of a plan of liquidation.

Green Field is a Lafayette, La.-based energy services company that operates in the well services and hydraulic fracturing services lines. The company filed for bankruptcy on Oct. 27 under Chapter 11 case number 13-12783.

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