HighPoint plan hearing set for March 18 despite trustee’s concerns

By Sarah Lizee

Olympia, Wash., March 17 – HighPoint Resources Corp.’s combined hearing on confirmation of its pre-packaged Chapter 11 plan and approval of the related disclosure statement has been scheduled for March 18, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Regions 3 and 9 U.S. trustee Andrew R. Vara objected to the company’s motion seeking the hearing, which is just four days after the bankruptcy petition was filed.

The U.S. trustee had said that parties-in-interest, including the court, require a meaningful opportunity to review, comment and be heard regarding confirmation.

Vara also 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 had said.

Plan terms

The company filed bankruptcy to effectuate the pre-packaged plan of reorganization and close a merger with Bonanza Creek Energy, Inc.

Key terms of the plan include cancelation of notes claims in exchange for Bonanza Creek common stock and new Bonanza Creek senior notes. Holders of allowed notes claims will receive their pro rata share of 9,314,214 shares of Bonanza Creek common stock, which will constitute around 30.4% of the fully diluted aggregate outstanding shares of Bonanza Creek common stock, subject to dilution, and $100 million in principal of newly issued 7˝% senior notes due 2026 of Bonanza Creek.

Existing HighPoint Resources interests will be canceled in exchange for Bonanza Creek common stock. Holders of existing HighPoint Resources interests will receive their pro rata share of 490,221 shares of Bonanza Creek common stock, which will constitute 1.6% of the fully diluted aggregate outstanding shares of Bonanza Creek common stock, subject to dilution.

The capital structure of Bonanza Creek will include an up to $250 million senior secured revolving credit facility. Allowed RBL claims are unimpaired under the pre-packaged plan.

Holders of allowed administrative claims, allowed priority tax claims, allowed other secured claims, allowed other priority claims and allowed general unsecured claims are unimpaired.

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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