Ryckman Creek disclosure statement OK’d; plan hearing begins Dec. 6

By Caroline Salls

Pittsburgh, Nov. 13 – Ryckman Creek Resources, LLC received court approval of the disclosure statement for its modified fourth amended plan of reorganization, according to an order filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

The plan confirmation hearing is scheduled to begin on Dec. 6.

Ryckman Creek said it entered into an agreement with plan sponsor 31 Midstream LLC.

Under the proposed plan, the sponsor will purchase 80% of the new common units in reorganized Ryckman in exchange for $500,000 in cash to the Ryckman estates on the plan effective date, an additional $1 million in cash to be paid in four installments and a $14.5 million note bearing interest at 3%.

The remaining 20% of the new common units will be issued to a trust to be distributed among some claimants, with 90% going to debtor-in-possession facility claimants and 10% to unsecured claimants.

The plan sponsor has also agreed to fund reorganized Ryckman’s working capital and capital expenditures in an amount of $5 million between the effective date and the first anniversary of the effective date and an incremental $5 million, or a lesser amount that is necessary to achieve a specified capacity at the Ryckman Creek facility, between the first and second anniversaries of the effective date.

According to the disclosure statement, the plan sponsor will have the right at any time before the 36-month anniversary of the effective date to purchase up to 75% of the liquidating trust common units in increments equal to 25% of the units.

The exercise price for each 25% segment of units will be $2.25 million if the call right is exercised before the 12-month anniversary of the effective date, $3.25 million if exercised on or after the 12-month anniversary and before the 24-month anniversary of the effective date and $4 million if exercised on or after the 24-month anniversary and before the 36-month anniversary of the effective date.

Holders of statutory lien claims that exercise an election will receive a share of a settlement pool. Those that do not make the election will receive a replacement lien attached to liquidating trust assets.

Interests will be cancelled, released and extinguished, and holders will receive no distribution.

Ryckman Creek is a Houston-based gas storage services company. It operates as a subsidiary of Peregrine Midstream Partners, LLC. Ryckman filed for reorganization under Chapter 11 on Feb. 2, 2016. The case number is 16-10292.

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