Eagle Valley subchapter V reorganization plan effective as of June 9

By Sarah Lizee

Olympia, Wash., June 9 – Eagle Valley Development, LLC’s Chapter 11 subchapter V small business plan of reorganization went into effect on Friday, according to a notice filed with the U.S. Bankruptcy Court for the Western District of Texas.

The plan, which was confirmed on March 28, is funded with cash on hand, the proceeds of a plan funding agreement, and proceeds from operations.

Under the plan funding agreement, within 30 days of the distribution record date, prepetition and debtor-in-possession lender AB Eagle Holdings, LLC was to provide the lesser of $450,000 or the allowed amount of all suspense fund claims to fund the suspense fund recovery.

All funds not otherwise required to pay allowed suspense fund claims were to be returned to AB Eagle.

For a period of 36 months from the effective date, AB Eagle will fund the documented, reasonable and necessary costs incurred by the debtors to satisfy their obligations to plug, abandon and decommission their existing oil and gas assets, for up to maximum amount of $700,000.

On the effective date, AB Eagle was to pay the subchapter V trustee $50,000 to fund the general unsecured creditor recovery under the plan.

AB Eagle agreed to provide additional equity contributions to Eagle Valley Energy Partners, LLC to fund the reasonable, necessary and documented general corporate needs incurred by the debtors for up to 36 months after the effective date up to a maximum amount $700,000.

Under a plan settlement, the holder of term loan claims was to receive allowed class 5 general unsecured claims in the amount of $830,000.

Holders of general unsecured claims were to receive a pro rata share of the GUC recovery.

Holders of suspense fund claims were to receive payment in full in class through the plan funding agreement.

Intercompany claims are being canceled with no distribution.

Other priority claims, other secured claims and interests are unimpaired by the plan.

Austin, Tex.-based Eagle Valley Development is an oil and natural gas company. The company filed bankruptcy on Jan. 27 under Chapter 11 case number 23-10035.

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