Linn Energy disclosure statement OK’d; plan hearing set for Jan. 24

By Caroline Salls

Pittsburgh, Dec. 14 – Linn Energy, LLC obtained court approval of the disclosure statement for its amended plan of reorganization, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan confirmation hearing is scheduled for Jan. 24.

In October, the company announced that it entered into an amended and restated restructuring support agreement with some holders of its 12% senior secured second-lien notes due December 2020, its unsecured notes and consenting lenders.

Linn said the amended and restated support agreement includes limited changes to the treatment of claims under the company’s credit agreement, including that those claims will be allowed as fully secured claims under the plan and will not be subject to off-set, avoidance, recharacterization, recoupment or subordination.

In addition, the amended and restated support agreement provides that holders of credit agreement claims will receive a cash paydown equal to $450 million if they elect to participate in an exit facility, plus other amounts.

The company entered into a backstop commitment agreement under which consenting noteholders agreed to backstop a $300 million new-money investment under a rights offering to be conducted in accordance with the plan.

Also under the plan, holders of the second-lien notes will receive their share of new common stock in the reorganized company, rights to purchase new common stock in the rights offering and $30 million of cash to the extent such holders vote their second-lien notes claims to accept the plan.

The holders of the company’s unsecured notes will receive their pro rata share of new common stock and rights to purchase new common stock in the rights offering.

The holders of unsecured claims against the company other than the unsecured notes will receive their share of new common stock and rights to purchase shares of new common stock.

All existing equity interests of the company will be extinguished without recovery.

Linn Energy, a Houston-based oil and gas company, filed for bankruptcy on May 11, 2016. The Chapter 11 case number is 16-60040.

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