Lilis Energy sets asset sale procedures; restructuring path preferred

By Caroline Salls

Pittsburgh, July 14 – Lilis Energy, Inc. requested court approval of the bid procedures for the proposed sale of its assets, according to a motion filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

Lilis said the bid procedures motion is being filed as a “precautionary alternative” to the company’s restructuring support agreement, which is its preferred path for resolution of its Chapter 11 cases.

The company said if lender Varde Partners, Inc. elects not to proceed with a $55 million new-money equity commitment included in the restructuring agreement by Aug. 17, “the debtors will be prepared to quickly pivot to a sales process in accordance with the bidding procedures.”

The bid procedures allow Lilis to select a stalking horse bidder at any time before Sept. 25. Those interested in serving as a stalking horse bidder must submit their offers by 6 p.m. ET on Sept. 21.

All other bids would be due by 6 p.m. ET on Oct. 1.

An auction would be held on Oct. 6, if necessary.

The minimum overbid amount is $500,000.

If the company’s pre-bankruptcy RBL lenders or lender agent are the winning bidder, that bidder may elect to implement the sale through a Chapter 11 plan toggle mechanism. The plan associated with any such transaction must pay the non-affiliate RBL obligations in full in cash.

Lilis is a Fort Worth-based independent oil and gas exploration and production company that operates in the Permian’s Delaware Basin. The company filed bankruptcy on June 28 under Chapter 11 case number 20-33274.

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