HighPoint: U.S. trustee says more time needed to mull Chapter 11 plan

By Sarah Lizee

Olympia, Wash., March 16 – The U.S. trustee overseeing HighPoint Resources Corp.’s Chapter 11 bankruptcy case objected to the company’s motion to confirm it’s pre-packaged plan on March 18, just four days from the petition date, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

“This extraordinary proposal is not supported by facts, the law, or the equities of this case,” Regions 3 and 9 U.S. trustee Andrew R. Vara said in his objection.

“The debtors’ plan contains no imminent temporal deadlines to become effective. The motion and the record presented by the debtors contain no evidence that the debtors will suffer immediate and irreparable harm to justify the extraordinary relief requested in the motion.

“Rather, the debtors will contend that an extrajudicial pre-petition bankruptcy process conducted by them in the weeks preceding the petition date should substitute for the immediate and irreparable harm standard to justify granting the extraordinary relief sought.”

All parties-in-interest, including the court, require a meaningful opportunity to review, comment and be heard regarding confirmation, Vara said.

“Pre-petition disclosure to non-voting classes of claims and interests advised parties about the ‘potential Chapter 11 cases’ and now seeks to impose pre-petition objection deadlines on parties who allegedly received the notices,” the U.S. trustee said.

“The debtors’ pre-petition conduct in treating themselves as if they were the Bankruptcy Court should not be condoned or sanctioned.”

Vara said the plan has several problems, including providing exculpation to non-estate fiduciaries, imposing third-party releases on non-voting classes who have not provided any consent to such, and issues affecting executory contracts.

“A meaningful opportunity for creditors and parties in interest to object in an open case will likely identify further infirmities in the plan,” Vara said.

Denver-based HighPoint is a company focused on the development of oil and gas assets located in the Denver-Julesburg Basin of Colorado. The company filed bankruptcy on March 14 under Chapter 11 case number 21-10565.

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