Approach Resources files plan of liquidation, disclosure statement

By Sarah Lizee

Olympia, Wash., Nov. 2 – Approach Resources, Inc. filed a Chapter 11 plan of liquidation and related disclosure statement on Friday in the U.S. Bankruptcy Court for the Southern District of Texas.

On Sept. 30, the debtors sold substantially all of their assets to Zarvona III-A, LP for $115.5 million.

The plan appoints a plan administrator to wind down the debtors’ limited remaining operations and distribute the remaining proceeds of the assets.

Holders of priority non-tax claims will receive cash payment in full.

Holders of prepetition secured claims will receive, following payment of the debtor-in-possession facility claims in full, all available cash, up to an amount necessary to satisfy the prepetition secured claims in full, except for any portion of available cash transferred by the debtors to fund the post-effective date agent professional retainers and such available cash transferred by the debtors or the plan administrator under the wind-down budget to fund the budgeted claims reserve, the professional fee claims reserve, and the gift reserve; and beginning on the first calendar quarter following the effective date, and continuing on at least a quarterly basis after that, the plan administrator will pay all available cash in excess of the amounts in the distribution reserve accounts then remaining to be paid under the wind-down budget, up to an amount necessary to satisfy the prepetition secured claims in full.

Holders of miscellaneous secured claims will receive payment in full in cash or the collateral securing their claims.

Holders of general unsecured creditor claims will receive their pro rata share of the first reserve following payment of all other claims and other amounts entitled to receive payment from the gift reserve under the plan, and, following the indefeasible payment in full of all prepetition secured claims, all remaining available cash.

Interests and intercompany claims will be cancelled with no distribution.

The debtors are seeking a hearing on conditional approval of the disclosure statement on Nov. 10 and a combined hearing on final approval of the disclosure statement and confirmation of the plan on Dec. 16.

Approach Resources is a Fort Worth-based oil and gas company. The company filed bankruptcy on Nov. 18, 2019 under Chapter 11 case number 19-36444.

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