Fidelity Investments and Apollo Global Management took control of a Texas driller with oil prices at historic lows in 2020, then kept the company alive until prices came back. Their payoff will likely be disappointing, WSJ Pro Bankruptcy reported. More than three years after Apollo, Fidelity and other top lenders to Mesquite Energy took over the company in chapter 11, a bankruptcy court stripped them of their controlling stake last week and left them with roughly 30% of the oil-and-gas company, saying the other 70% of its shares belong instead to its unsecured creditors. The allocation of equity marks an unusual coda to the bankruptcy process for Mesquite, which nearly went out of business when the COVID-19 pandemic crushed oil prices, only to see its assets soar in value as energy demand recovered. The biggest beneficiary of Thursday’s ruling, which can be appealed, is asset manager Benefit Street Partners, which lost money in the company’s 2020 restructuring but bet it could win some back by bankrolling litigation to wrest shares in the restructured company from Fidelity and Apollo, according to court records and people familiar with the dispute.
