|View printer-friendly version|
Lilis Energy Voluntarily Files for Chapter 11 Bankruptcy
June 29, 2020
The Chapter 11 petitions were filed in accordance with a Restructuring Support Agreement (the “RSA”) entered into among the Company and certain of its subsidiaries, certain investment funds and entities affiliated with Värde
Under the RSA, the Company and its subsidiaries, the RBL Lenders and the Värde Funds have agreed, subject to certain conditions set forth in the RSA, to support a restructuring of the Company and its subsidiaries under a Chapter 11 plan of reorganization (a “Plan”) to be proposed with terms set forth in the RSA. Such Plan, if consummated, is expected to reduce the Company’s funded debt obligations by more than
The Plan contemplated by the RSA further provides that shares of the Company’s common stock will be canceled for no consideration. The Company believes it is unlikely that the holders of shares of its common stock will receive any consideration for their shares under any plan approved by the Court, irrespective of whether such plan contemplates terms consistent with or similar to those agreed upon in the RSA. Consummation of any restructuring plan will be subject to confirmation by the Court and the satisfaction, or waiver by appropriate parties, of any conditions set forth in such plan and related transaction documents.
The Company expects to continue to operate in the ordinary course throughout the restructuring process without material disruption to vendors, suppliers and partners.
The Plan is contingent upon the Värde Funds’ election to provide, on or before
“Like many companies in the oil and gas industry, we have been impacted by the severe downturn in commodity prices throughout the COVID-19 pandemic,” said
With the filing, and subject to court approval, the Company has received a commitment from its bank lenders under its Credit Agreement to provide up to
Additional information about these Chapter 11 cases can be accessed via PACER at https://www.pacer.gov and, subject to the Court’s approval, at https://cases.stretto.com/LilisEnergy or by calling (855) 364-4639 (Toll-Free) or (949) 266-6357 (Local).
This news release contains “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not statements of historical facts and often contain words such as “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “estimate,” “seek,” “could,” “should,” “intend,” “potential” or words of similar meaning. Forward-looking statements are based on management’s expectations, beliefs, assumptions and estimates regarding the Company, industry, economic conditions, government regulations and energy policies and other factors. Forward-looking statements may include, for example, statements regarding the Chapter 11 cases, the provision of DIP financing facilities, the Company’s ability to complete the restructuring, the expected terms of a proposed Plan, its ability to continue operating in the ordinary course while the Chapter 11 cases are pending and the treatment of its creditors and common stock under a Plan. These statements are subject to significant risks, uncertainties and assumptions difficult to predict and could cause actual results to differ materially and adversely from those expressed or implied in the forward-looking statements, including risks and uncertainties regarding the Company’s ability to complete a reorganization process under Chapter 11, including consummation of the restructuring in accordance with the terms of any restructuring support agreement; potential adverse effects of the Chapter 11 cases on the Company’s liquidity and results of operations; the Company’s ability to obtain timely approval by the bankruptcy court regarding the motions filed in the Chapter 11 cases; objections to the Company’s restructuring process, the DIP facility, or other pleadings filed that could protract the Chapter 11 cases; employee attrition and the Company’s ability to retain senior management and other key personnel due to the distractions and uncertainties, including the Company’s ability to provide adequate compensation and benefits during the Chapter 11 cases; the Company’s ability to comply with the restrictions imposed by the DIP facility and other financing arrangements; the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties and regulatory authorities because of the Chapter 11 filing; the effects of the Chapter 11 cases on the Company and on the interests of various constituents, including holders of the Company’s common stock; the effects of the Chapter 11 cases on the market price of the Company’s common stock and on the Company’s ability to access the capital markets; the bankruptcy court’s rulings in the Chapter 11 cases, including the approvals of the terms of the restructuring and the DIP facility, and the outcome of the Chapter 11 cases generally; the time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 cases; risks associated with third party motions in the Chapter 11 cases, which may interfere with the Company’s ability to consummate the restructuring or an alternative restructuring; increased administrative and legal costs related to the Chapter 11 process; potential delays in the Chapter 11 process due to the effects of the COVID-19 coronavirus; and other litigation and inherent risks involved in a bankruptcy process. Forward-looking statements are also subject to the risk factors and cautionary language described occasionally in the reports and registration statements the Company files with the
Source: Lilis Energy, Inc.