CorEnergy: Preferred stockholders object to plan’s ‘death trap’

By Sarah Lizee

Olympia, Wash., April 23 – CorEnergy Infrastructure Trust, Inc.’s Chapter 11 plan drew an objection from an informal group of holders of 7 3/8% series A cumulative redeemable preferred stock, according to documents filed Monday with the U.S. Bankruptcy Court for the Western District of Missouri.

The group said the plan includes a “death trap” for class 6 preferred equity holders. If class 6 rejects the plan, holders will receive no recovery.

However, holders of the Grier member claims, which appear to be based on an exchange of equity securities in a non-debtor entity and held by insiders, will receive a recovery, the group said.

“This court should at a minimum deny confirmation of the proposed plan subject to removal of the ‘death trap’ provision,” the group said in the objection.

The group also said it is continuing to evaluate the debtors’ proffered valuation.

The combined hearing on confirmation of the plan and final approval of the disclosure statement is scheduled for May 22.

CorEnergy is a Kansas City, Mo.-based real estate investment trust that owns critical energy assets, such as pipelines, storage terminals and transmission and distribution assets. The company filed bankruptcy on Feb. 25 under Chapter 11 case number 24-40236.

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