Sable Permian Resources LLC has ended the threat of clawback attempts by junior creditors irked about the $16 million in executive bonuses the Texas fracker handed out to top executives months before it went bankrupt, WSJ Pro Bankruptcy reported. Sable Permian has reached a settlement with the junior creditors who had accused the company of timing its bonuses “with the express purpose” of evading bankruptcy-court supervision, according to documents filed with the bankruptcy court on Wednesday. In exchange for dropping the threat of litigation over the bonuses, and agreeing to back the restructuring and grant broad legal immunity, junior creditors will share $11 million in cash and warrants that entitle them to buy up to 10 percent of the equity of the reorganized fracker, provided the company is profitable once it emerges from bankruptcy. To dodge legal restrictions on bonus pay during bankruptcy, many troubled companies during the COVID-19 pandemic have paid tens of millions of dollars to corporate leaders just before filing for court protection, including retention bonuses that are severely restricted in the bankruptcy code. Sable Permian was one of those companies, handing out compensation to 18 corporate insiders before it filed for bankruptcy in June.
