Paragon subsidiary Prospector seeks approval to use cash collateral

By Caroline Salls

Pittsburgh, July 21 – Prospector Offshore Drilling Sarl requested court approval to use the cash collateral of security agent Industrial and Commercial Bank of China, New York Branch (ICBC) to fund its operations while in bankruptcy, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Prospector said its Chapter 11 bankruptcy cases were filed, in large part, because third-party lessors and ICBC demanded payment of more than $30 million in termination fees, default interest under sale-leaseback agreements and additional fees and expenses.

The company said it needs funds primarily to make monthly lease payments due under the lease agreements, pay operating expenses related to the ordinary course operations of its rigs and pay employees and other expenditures that are critical to its continued viability and ability to reorganize its capital structure.

According to its Chapter 11 petition, Prospector has $1 billion to $10 billion in both assets and debt.

The company is represented by Richards, Layton & Finger, PA.

Prospector is a subsidiary of Paragon Offshore plc, a Houston-based provider of offshore drilling rigs. The Chapter 11 case number is 17-11572.

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