Denbury Resources Inc. plans to hand ownership over to creditors as part of a bankruptcy strategy that would eliminate $2.1 billion in bond debt, WSJ Pro Bankruptcy reported. The oil-and-gas company filed for chapter 11 protection on Thursday in U.S. Bankruptcy Court in Houston. The proposed restructuring includes giving second-lien bondholders and convertible noteholders nearly all of the equity in the reorganized business. Denbury had warned this week that a bankruptcy filing was likely. Under the plan, GoldenTree Asset Management LP would get a seat on the company’s new board of directors. The board also would include two directors selected by Fidelity Management & Research Co., as well as others picked by a second-lien creditor committee. The Plano, Texas-based company, the latest in a series of energy businesses to file for bankruptcy, said it suffered a one-two punch earlier this year due to the coronavirus pandemic and the disagreement between Russia and the Organization of the Petroleum Exporting Countries. Oil prices plunged. Although crude prices have recovered somewhat, they continue to hover in the low-$40s, Denbury Chief Executive Christian Kendall said in a declaration filed in bankruptcy court. Denbury’s production and development activities are in the Gulf Coast and Rocky Mountains regions. The company entered bankruptcy with a restructuring agreement backed by all lenders under a revolving credit facility and by creditors holding 67 percent of its second-lien bonds and 73 percent of its convertible notes.
