Storm Cat's disclosure gets court approval; plan hearing is Feb. 7

By Lisa Kerner

Charlotte, N.C., Dec. 23 - Storm Cat Energy (USA) Corp. debtor Storm Cat Energy (Powder River) LLC's disclosure statement was approved, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Colorado.

A plan confirmation hearing is set for Feb. 7, the filing said.

Earlier in the month, Storm Cat amended its plan of reorganization to modify the creditor treatment for holders of Baker/MO claims.

As previously reported, under the amended plan holders of Baker/MO claims will receive a new contract, and the parties will execute mutual releases except for their pre-bankruptcy secured claims to the same property as Pearl will be assigned to Regiment.

Holders of Baker/MO claims were to receive common stock in a new company, under the previous plan,

The plan is based on a Regiment subsidiary making an $8 million equity investment for all of the equity of the new company.

The plan will also be funded by cash from continued operations, debtor-in-possession financing and a restructuring transaction with Newco.

Treatment of creditors will include:

• U.S. trustee fees, cure payments on assumed contracts and leases, professional fee claims, administrative claims and the secured claims of Wells Fargo Capital Finance will be paid in full in cash;

• Priority claims will either be reinstated or holders will be paid in full in cash or paid with a promissory note;

• Regiment and Ableco Finance LLC will receive no distribution in exchange for their secured claims;

• Holders of Banker/MO claims will receive a new contract, and the parties will execute mutual releases except for their pre-bankruptcy secured claims to the same property as Pearl will be assigned to Regiment;

• Treatment of Pearl secured claims will depend on the outcome of lien status litigation;

• Holders of general unsecured claims will receive avoidance action proceeds and, if they vote to accept the plan, they will receive silent profit participation in Newco;

• Holders of oil and gas royalty and lease payment claims will receive full payment as due; and

• Holders of equity interests will receive no distribution.

Storm Cat, with headquarters in Denver and Calgary, Alta., filed for bankruptcy on Nov. 10, 2008. The Chapter 11 case number is 08-27887.

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