Paragon Offshore equityholders denied stay of plan confirmation order

By Caroline Salls

Pittsburgh, July 5 – Paragon Offshore plc equityholders Michael Hammersley and Marcel de Groot’s motion for a stay of the order confirming the company’s fifth joint Chapter 11 plan was denied Wednesday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan was confirmed on June 7. Hammersley and Groot appealed the plan confirmation order on June 21.

In their stay motion, the equityholders said the confirmed plan “in clear departure from the earlier plans proposed by the debtors, provides no recovery at all to the equityholders and divests them of any interests in the debtors.”

“The plan does not properly value the business and all of its assets or attribute any value to the Noble claims that are being distributed to various creditors through shares in a litigation trust,” Hammersley and Groot said in their motion.

In addition, the shareholders said they retained counsel in the United Kingdom to review significant issues regarding whether Paragon had the corporate authority to take actions it took in the United States and whether the rights of shareholders have been violated under U.K. law.

“A stay will provide shareholders with a meaningful ability to pursue these significant issues in the U.K. and potentially prevent the manifest injustice that would occur if debtors were able to use the U.S. bankruptcy procedure to circumvent U.K. shareholder protections,” the motion said.

Paragon, a Houston-based provider of offshore drilling rigs, filed for bankruptcy on Feb. 14, 2016. The Chapter 11 case number is 16-10386.

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