Sabine Oil & Gas Corp. and Samson Resources Corp., energy producers with a combined debt of nearly $8 billion, are facing showdowns over plans to exit bankruptcy as junior creditors are demanding larger repayments, Reuters reported yesterday. Sabine and Samson were among the biggest bankruptcies in the energy sector last year, when energy prices began falling sharply. Both proposed to exit chapter 11 by swapping control of the company to their lenders in return for eliminating billions of dollars of debt. Both bankruptcy exit plans have run into objections from official committees of unsecured creditors. Sabine's creditors argued in court papers filed on Wednesday that the company improperly valued lenders' collateral, which led to a plan that is unfair to unsecured creditors. While Sabine has proposed giving unsecured creditors equity worth $6.8 million in a reorganized Sabine, the unsecured creditors argued they could be entitled to $268 million. The company's unsecured creditors are owed $1.4 billion. Samson's unsecured creditors made similar arguments in court papers filed on Tuesday in which they asked the U.S. Bankruptcy Court in Delaware to take the relatively rare step of ending the company's exclusive right to propose a plan of reorganization. The Samson committee proposed its own plan in which certain unsecured creditors would end up controlling the company through a debt-for-equity swap and a rights offering for shares in the reorganized company. Read more.
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