While ATP Oil & Gas Corp. was winning interim approval to finance the bankruptcy reorganization begun on Aug. 17, two creditors contend that the company did not disclose that it had received a demand from the U.S. Interior Department requiring the posting of $70 million in bonds to cover the plugging and abandonment of wells, Bloomberg News reported on Friday. After a hearing on Aug. 21, it won approval of secured financing, including interim authorization for part of the financing intended ultimately to include $250 million in new borrowing power. In addition, the court allowed the lenders to convert about $365 million in pre-bankruptcy secured debt into a post- bankruptcy obligation. Warrior Energy Services Corp. and Superior Energy Services LLC contended in a court filing that ATP failed to disclose to the parties or to the court that it had received the Interior Department’s demand for bonds on Aug. 17. The creditors say that the demand for bonds may be a default under the newly approved interim financing agreement. The creditors are asking the bankruptcy judge in Houston to reconsider approval of the financing, especially the conversion of $365 million in pre-bankruptcy debt. The reconsideration hearing is on the court’s calendar for Sept. 6.
