Breitburn Energy Partners LP detailed plans at a court hearing yesterday to exit bankruptcy by transferring the oil-and-gas producer’s assets to creditors, but opponents pressed for an auction of main reserves to generate more money, Reuters reported. Breitburn filed for chapter 11 protection in May 2016, one of more than 100 energy companies that sought court protection from creditors after oil prices crashed from more than $100 a barrel in 2014. Yesterday it proposed splitting into two companies, with one owning its prized assets in the Permian Basin in Texas and the other owning its reserves in California, the Rocky Mountains, U.S. Midwest and U.S. Southeast. Holders of Breitburn’s unsecured bonds would be given the opportunity to buy their share of the Permian company’s stock, valued at $775 million, in what is known as a rights offering. The stock sale would be guaranteed or backstopped by a group of creditors led by the investment firms Elliott Management Corp and W.L. Ross & Co, founded by U.S. Commerce Secretary Wilbur Ross. The bondholders guaranteeing the stock sale would receive the opportunity to buy at least 40 percent of the stock and would receive additional stock as a fee. Read more.
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