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il and natural gas producer Penn Virginia Corp. said today that it had filed for bankruptcy protection, the latest company to fall victim to the oil price rout, Reuters reported. Dozens of U.S. shale companies have sought bankruptcy protection in recent months as a near-60 percent slump in oil prices since mid-2014 erodes cash flows. Penn Virginia said its restructuring was supported by 86 percent of its senior noteholders and all of its bank lenders, and would reduce its long-term debt by more than $1 billion. As of March 31, the company had total debt of $1.22 billion, according to a regulatory filing. Penn Virginia said it expected to emerge from bankruptcy protection by the end of the summer. The company said it expected to receive $25 million in debtor-in-possession financing subject to court approval. Penn Virginia said it had also received a commitment for up to $128 million in exit financing and a $50 million rights offering that is backed by some senior unsecured noteholders.

Linn Energy LLC, reeling from the oil and gas slump, filed for bankruptcy protection in Texas with a debt-restructuring agreement that would split off Berry Petroleum Co., Bloomberg News reported yesterday. The Houston-based exploration and production company intends to keep operating during the reorganization. Linn said that it has enough cash on hand to run the business and doesn’t intend to arrange debtor-in-possession financing. The collapse in oil and gas prices forced companies to slash more than $100 billion in spending globally and eliminate more than 250,000 jobs in 2015. In February, Linn tried to buy time by exhausting a $3.6 billion credit facility. That added about $919 million to its debt load, while its Berry Petroleum unit used up a $900 million facility. Linn also hired Lazard as financial adviser and Kirkland & Ellis LLP for legal counsel. Read more. 

A panel of experts dissects current issues in the energy sector at today’s New York City Bankruptcy Conference. Walk-up registration available! 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

Investors in the $225 billion distressed-debt market are watching a Manhattan appeals court to see whether judges can impose what the U.S. Chamber of Commerce has called “revolutionary” new limits on out-of-court restructurings, Bloomberg News reported today. Three federal judges will hear arguments today in a $14 million dispute over how much corporate borrowers can alter debt terms before they run afoul of a Depression-era law designed to protect bondholders. Last year, a lower-court judge set a new, more stringent standard that critics say would force more companies into bankruptcy by limiting their restructuring options. Caesars Entertainment Corp. is embroiled in similar bondholder disputes and has said that it risks bankruptcy if the appeals court lets the new interpretation stand. The gambling giant, which put its main operating unit into chapter 11 last year, faces five lawsuits by bondholders, or their trustees, who are owed $11 billion and say the company violated the 1939 Trust Indenture Act, or TIA. In June, U.S. District Judge Katherine Polk Failla held that Education Management Corp., a for-profit college operator, violated the TIA by forcing unsecured creditors including Marblegate Asset Management to choose between accepting stock in a reorganized company or standing aside as assets that could have covered their debts were transferred out of reach. Read more. 

In December, there were legislative efforts to include a proposed omnibus appropriations rider that would amend the Trust Indenture Act of 1939. Those efforts were postponed. Listen to an ABI podcast between ABI Resident Scholar Melissa Jacoby and Prof. Mark Roe from December on the issues surrounding TIA. 

The solar panel industry is performing worse than coal stocks so far in 2016, despite benefiting from billions of dollars in government subsidies, DailyCaller.com reported yesterday. Stocks in SolarCity Corp., the largest rooftop installer in the U.S. and the brainchild of Elon Musk, tumbled by as much as 27 percent Tuesday — this, after the government subsidized company scaled back its installation projections several times since the beginning of the year. One of SolarCity’s primary competitors, and once considered the fastest-growing renewable energy company, SunEdison Inc., filed chapter 11 bankruptcy in April. Meanwhile, coal prices are evening out after several years of pro-longed price tumbles. In fact, according to the U.S. Energy Information Administration, the spot price for Central Appalachian Coal, as well as other coal regions, is keeping the line at $40.50.

Oklahoma oil and gas producer Chaparral Energy Inc. is claiming a key advantage as it launches a bankruptcy turnaround effort: $152 million in bank accounts beyond the reach of secured lenders, the Wall Street Journal reported today. Dozens of oil and gas companies have dropped into bankruptcy in recent years, taken down by falling commodity prices. Chaparral was following the same path when, in February, it drew down the maximum allowed on its top-ranking loan. On Monday, Chaparral filed for chapter 11 protection with funds still in the bank. Instead of being forced to make concessions to lenders that would tie its hands in a restructuring, which is what often happens in bankruptcy, the cash gives the Oklahoma company a measure of freedom. When Chaparral appears today for its debut hearing in the U.S. Bankruptcy Court in Wilmington, Del., it will seek court orders allowing it to cover payroll and pay essential bills, as well as a court order authorizing it to use its free cash. Read more. (Subscription required.) 

A panel of experts dissects current issues in the energy sector at tomorrow’s New York City Bankruptcy Conference. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition.

Netflix Inc. is threatening to stream two films produced by Relativity Media LLC before their debut in theaters, a move the Hollywood studio says could prove devastating as it seeks to regain its footing after emerging from bankruptcy protection, the Wall Street Journal reported today. Relativity, the upstart movie studio founded by Ryan Kavanaugh that recently exited chapter 11, says that the two films — a comedy starring Kristen Wiig called “Masterminds” and a thriller with Kate Beckinsale called “The Disappointments Room” — are key elements in its nascent comeback. A premature release of the films on Netflix’s streaming service could torpedo plans for the theatrical release, Relativity’s lawyers say, and leave the studio’s future hanging in the balance. In court papers filed over the weekend, Relativity said that the streaming giant is attempting to “extract a pound of flesh” after a bankruptcy judge rejected Netflix’s objections to the studio’s reorganization plan.

Solar panel installer Vivint Solar Inc. said that it would participate in SunEdison Inc.’s bankruptcy case to maximize its recovery from claims against SunEdison, which terminated its agreement to buy Vivint in March, Reuters reported today. Vivint Solar has filed a lawsuit in Delaware against SunEdison alleging that the solar company willfully breached its obligations under their merger agreement and is seeking damages. SunEdison's bankruptcy filing on April 21 has created a temporary stay on the prosecution of Vivint's lawsuit, the company said in a regulatory filing today. SunEdison, once the fastest-growing U.S. renewable energy company, filed for chapter 11 protection after a short-lived but aggressive spate of debt-fueled acquisitions proved unsustainable. Investors began to lose confidence in SunEdison's expansion, when the company announced a $2.2 billion deal to acquire Vivint in July. The Vivint deal also led to a lawsuit by billionaire David Tepper's Appaloosa Management, which sued to block SunEdison's unit, TerraForm Power Inc., from buying some Vivint assets.

Magnum Hunter Resources Corp. and certain of its wholly-owned subsidiaries announced yesterday that its chapter 11 reorganization plan has gone effective and it has emerged from bankruptcy, the ABL Advisor reported yesterday. Magnum Hunter’s plan, which was confirmed by the U.S. Bankruptcy Court for the District of Delaware on April 18, de-leveraged substantially all of Magnum Hunter's $1 billion of pre-bankruptcy funded indebtedness and converted 100 percent of its post-filing debtor-in-possession financing into equity pursuant to a consensual debt-to-equity exchange.

Oil and gas company Chaparral Energy Inc. filed for chapter 11 protection yesterday, the latest victim of low oil prices that continue to devastate the industry, the Wall Street Journal reported today. The Oklahoma City-based oil and gas driller filed for chapter 11 protection as it works to negotiate the terms of a debt-for-equity swap with its lenders and bondholders that will slash $1.2 billion in debt off its books. The company intends to continue operating without interruption throughout the restructuring and is seeking court approval to continue paying its employee and royalties to mineral owners. Chaparral skipped a March interest payment to bondholders and said it would default on the bonds, and thus all $1.6 billion of its debt, at the expiration of a 30-day grace period. Read more. (Subscription required.) 

A panel of experts dissects current issues in the energy sector at Thursday’s New York City Bankruptcy Conference. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

A government watchdog warned that the restructuring plan of bankrupt Alpha Natural Resources could be held up because a unit of consulting firm McKinsey & Co. failed to fully disclose connections with potential buyers of the coal miner's assets, Reuters reported on Friday. Alpha hired McKinsey Recovery & Transformation Services to lead its turnaround plan after filing for bankruptcy in August, hit by a sharp drop in coal prices. The U.S. Trustee said in a court filing on May 3 that McKinsey RTS has not disclosed the names or nature of its connections to Alpha's lenders, creditors and competitors as required by bankruptcy law. In the filing, the U.S. Trustee said the lack of full disclosures may "cast a cloud" over Alpha's restructuring strategy.