Tenrgys files bankruptcy following failed negotiations with lender

By Sarah Lizee

Olympia, Wash., Sept. 21 – Tenrgys, LLC filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Southern District of Mississippi.

The debtors have two outstanding funded debt facilities, including a secured credit facility with about $54 million of principal outstanding, all of which is held by PanAm19 Holdings, LLC, and an unsecured term loan of about $75 million, all of which is held by FS/EIG Advisor, LLC. Both facilities have matured and have not been repaid.

“For nearly two years, the debtors have tried to achieve a consensual, out-of-course restructuring with the support of both PanAm and EIG,” Tenrgys manager Richard H. Mills, Jr. said in a declaration.

“In particular, over the last several months, both EIG and the debtors have been prepared to execute several iterations of restructuring transactions; each time, PanAm has ultimately refused to sign a deal on terms that it previously indicated support for, and that reflected continued, material concessions from the debtors and EIG.”

Mills said PanAm recently sent the company a notice of default and demanded payment of past due interest. The demand was later withdrawn, but the likelihood of foreclosure or “other value-destructive action” by PanAm remains, Mills added.

Shortly before filing its petition, the company and FS/EIG entered into a restructuring support agreement in which FS/EIG agreed to support the debtors’ plan of reorganization, which the company plans to file soon.

The debtors’ management may raise up to $5 million of financing in the form of an exit facility to be provided to the reorganized debtors on the effective date. Proceeds will be used to fund payments under the plan.

The company has received interim approval to use the cash collateral of PanAm19.

Tenrgys said it does not have enough unencumbered funds to operate its business on an ongoing basis.

The company listed $100 million to $500 million of assets, and about $129 million of funded debt.

Its largest unsecured creditor is FS Energy & Power, based in Washington, D.C., with a $75 million term loan claim.

Ridgeland, Miss.-based Tenrgys operates an independent oil and natural gas business. The Chapter 11 case number is 21-01515.

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