Lightstream Resources Ltd. is seeking court protection from creditors after failing to win enough support for a restructuring plan meant to cut debt at the Canadian oil driller by $904 million, Bloomberg News reported yesterday. The company plans to make a court filing under Canada’s Companies’ Creditors Arrangement Act on Sept. 26, Calgary-based Lightstream said Monday in a statement. The filing had been contemplated as an alternative to a proposal made in July to hand control of the recapitalized company to its highest-ranked bondholders. Unsecured lenders and shareholders would have received small stakes. Hedge fund Mudrick Capital Management LP, an unsecured noteholder, opposed the swap because it would have awarded equity to existing shareholders. Mudrick also said that a previous restructuring had bumped the fund down the capital structure, depriving it of a larger stake in the company under the July plan. Mudrick and FrontFour Capital Group LLC sued Lightstream after a 2015 debt swap gave a higher claim on the producer’s assets to distressed-debt investors Apollo Global Management LLC and Blackstone Group LP’s GSO Capital. The hedge funds said that they shouldn’t have been left out of that deal. Read more.
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