Linc USA disclosure conditionally OK’d; plan hearing set for Feb. 13

By Caroline Salls

Pittsburgh, Jan. 10 – Linc USA GP’s disclosure statement was conditionally approved on Monday by the U.S. Bankruptcy Court for the Southern District of Texas, allowing the company to begin to solicit votes on its plan of liquidation.

According to Monday’s order, Linc will begin to solicit plan votes on Friday. A combined plan confirmation and final disclosure statement approval hearing is scheduled for Feb. 13.

A creditor trust will be formed under the plan for the benefit of pre-bankruptcy noteholders and holders of general unsecured claims.

All of the company’s remaining assets, including litigation rights and cash, will be transferred to the trust for monetization and distribution.

Under the plan, first-lien noteholders are entitled to receive 100% of Gulf Coast sale proceeds less the amount of a claims reserve holdback, and 100% of Wyoming sale proceeds.

A total of $950,000 of creditor trust cash assets will be earmarked solely for distribution to holders of general unsecured claims who are not pre-bankruptcy noteholders.

The balance of the creditor trust assets will be allocated among the noteholders and the unsecured creditors, with the two groups each receiving 50% of cash securing performance bonds naming Linc Energy Operations Inc. (LEO) as the principal once those funds are refunded to LEO, and all other assets being split with 60% going to the noteholders and 40% to the unsecured creditors.

The creditor trust will initially be funded with $100,000 from the noteholders’ share of the proceeds of the LEO bonds. The noteholders will then be entitled to the first $100,000 of proceeds from creditor trust assets other than those bonds as repayment of that initial funding.

Second-lien notes claims will be deemed satisfied, compromised, settled and released in full on the plan effective date.

All equity interests and intercompany claims will be canceled and extinguished, and holders will receive no distribution.

Linc Energy is a Brisbane, Australia-based energy producer with a commodity portfolio including oil, gas, shale and coal. Its U.S. subsidiaries filed for bankruptcy on May 19, 2016 under Chapter 11 case number 16-32689.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.