%1

Oil and gas explorer Magnum Hunter Resources Corp. struck a deal in court yesterday to resolve the first of several requests to exit burdensome pipeline agreements as part of its restructuring, Dow Jones Daily Bankruptcy Review reported today. Instead of arguing for the right to tear up pipeline agreements with Texas Gas Transmission LLC, which committed to expanding a pipeline system that stretches from Louisiana to Ohio, lawyers for both sides announced a deal that gives Magnum Hunter an out. Texas Gas lawyer John Melko told the U.S. Bankruptcy Court in Wilmington, Del., that in return for allowing Magnum Hunter to reject the pipeline agreements, Texas Gas would get a $15 million unsecured claim against Magnum Hunter in its bankruptcy case. Magnum Hunter's pending repayment plan allows unsecured creditors to choose between receiving cash or equity. Read more. (Subscription required.) 

Will exploration and production hit bottom in 2016? Be sure to attend ABI's Annual Spring Meeting in Washington, D.C., from April 14-17, as a panel of experts will be addressing this topic. Register today! 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt with ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy.

Relativity Media LLC pushed back a key bankruptcy court hearing scheduled for Wednesday as questions linger about its pending exit from chapter 11, the Wall Street Journal reported today. Court papers filed on Monday with the U.S. Bankruptcy Court in Manhattan show Relativity adjourned the hearing at which Judge Michael Wiles was to deal with remaining objections to its bankruptcy-exit proposal, rescheduling for March 31. The adjournment comes as creditor Netflix Inc. has raised questions in court and in court papers about Relativity’s ability to meet conditions needed to secure Judge Wiles’s final approval of its bankruptcy-exit plan. When the judge preliminarily approved the plan last month, he said that Relativity must procure at least $80 million in new funding and complete deals that would make actor Kevin Spacey the studio’s chairman and producer Dana Brunetti as its president.

A bankruptcy judge approved GT Advanced's plan to exit chapter 11 protection, closing the book on the New Hampshire's manufacturer's case that began with a disastrous run-in with smartphone giant Apple Inc., Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Henry J. Boroff on Tuesday signed off on GT Advanced’s exit from bankruptcy, which was triggered by the collapse of a supply deal with Apple Inc. Tapped as a supplier of scratch- and shatter-resistant sapphire screen material for Apple's smartphones, GT Advanced piled on debt and transformed its business operation. Apple rejected the material GT Advanced produced, for reasons that were disputed. GT Advanced resorted to bankruptcy in October 2014 to repair its tattered finances. The company is returning to its roots as a manufacturer of industrial equipment. It reached a settlement with Apple that resolves the smartphone giant's claim to be owed $439 million due to the failed sapphire supply venture.

U.S. coal company Alpha Natural Resources Inc. said that it sought approval from a U.S. bankruptcy court last month to sell its core assets as part of a plan to emerge from chapter 11 protection, Reuters reported yesterday. Alpha Natural said that it filed a motion in the U.S. Bankruptcy Court for the Eastern District of Virginia in February, seeking permission to sell the assets through a stalking-horse bid of at least $500 million from its first-lien lenders led by Citicorp North America Inc. A hearing is scheduled for March 10 and the company expects a conclusion of its bankruptcy proceedings by June 30, Alpha Natural said yesterday.

A failed effort to find a buyer has roiled the bankruptcy of Molycorp Inc., a rare-earths company that is pursuing a plan that will make it largely the property of Oaktree Capital Group LLC, the Denver Post reported today. After scrapping an auction because of a lack of acceptable bids, Greenwood Village, Colo.-based Molycorp is trying to get out of bankruptcy reorganized around one line of business, Neo, with the fate of another still up in the air. Bondholders are saying that Molycorp wrongly rejected their bid for the Mountain Pass facility, the only bid that came in for a line of business Molycorp spent $1.7 billion to establish. Molycorp filed for chapter 11 protection in June 2015, its balance sheet rendered unworkable due to a switch in Chinese trade policy that sent the prices of rare earth's diving. Shareholders sued, and hoped to collect against Molycorp's officers and directors liability insurance. The settlement instead lets Molycorp's leaders and its insurance company off the hook in exchange for some money for unsecured creditors. Molycorp, Oaktree and unsecured creditors say the settlement was the best way out of a morass of arguments that marked the Chapter 11 proceeding. Bondholders left out of the negotiations say the deal is bad and that they will challenge it when Molycorp's bankruptcy exit plan is presented for confirmation. Read more. 

Learn more about D&O insurance policies in bankruptcy as a panel of experts tackle this important topic at ABI’s Annual Spring Meeting. Register today. 

Sabine Oil & Gas Corp. won an important court ruling yesterday that will allow the bankrupt energy producer to shed certain pipeline contracts, potentially exposing companies that transport and process gas to the crisis in the energy industry, Reuters reported. The bankruptcy court ruling is the first major test of whether chapter 11 can be used to end a contract with companies in what is known as the midstream sector of the energy industry. "The debtors have satisfied the standard for the rejection of the contracts," said Bankruptcy Judge Shelley Chapman. Her decision can be appealed and is not binding. But it may encourage other struggling producers to follow suit at a time when scores of oil and gas companies are teetering on the brink of bankruptcy. Judge Chapman's decision clears the way for Sabine to seek a new midstream operator to build a pipeline system in southern Texas to replace the existing one built by an affiliate of Cheniere Energy Inc. The company's lawyers have also said they may use the ruling to renegotiate with Cheniere. Sabine said in court papers a new midstream operator would save it $35 million. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt with ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

Will exploration and production hit bottom in 2016? Be sure to attend ABI's Annual Spring Meeting in Washington, D.C., from April 14-17, as a panel of experts will be addressing this topic. Register today!

Creditors of Russian billionaire Vladislav Doronin's Aman Resorts Group Ltd., are trying to push the ultra luxurious resort operator favored by rock royalty, Hollywood stars and business tycoons into bankruptcy, Dow Jones Daily Bankruptcy Review reported today. The backers, namely American venture capitalist Omar Amanat, British hedge fund manager George Robinson and resort founder Adrian Zecha, said in court papers filed yesterday that the hotel chain owes them about $70.9 million in unpaid fees.

Wells Fargo & Co. and a Rhode Island government agency were sued by a U.S. regulator for allegedly misleading investors about how much money a company led by former Boston Red Sox pitcher Curt Schilling needed to develop a video game, Bloomberg News reported yesterday. After being hired to find financing for Schilling’s 38 Studios LLC, Wells Fargo failed to disclose that the $50 million raised from a bond offering was at least $25 million short of what the company needed to bring the game to market, the Securities and Exchange Commission said yesterday. The Rhode Island Economic Development Corp. also knew that the bond sale wouldn’t raise enough money for Schilling’s company, the SEC said. “Municipal issuers and underwriters must provide investors with a clear-eyed view of the risks involved in an economic development project being financed through bond offerings,” said Andrew J. Ceresney, head of the SEC’s enforcement division.