Texas oil and gas company files for Chapter 11 bankruptcy
Posted on Friday, December 18th, 2015 at 6:03 pm
Magnum Hunter Resources Corp. filed for Chapter 11 bankruptcy protection on Dec. 15 in the hopes of trading debt-for-equity with lenders. Like many energy companies, low oil prices led to Magnum Hunter incurring significant debt and poor profits. The bankruptcy filing was made in a U.S. Bankruptcy Court in Wilmington, Del. It has gained support by approximately 75 percent of debt-holders within the publicly traded company. If the deal goes through, Magnum Hunter will be given to lenders and bondholders for the forgiveness of a $1 billion in debt.
Magnum Hunter has not prepared a fully prepacked bankruptcy case, but it is expected that the case will move quickly through court and court protection will end as soon as the spring of 2016. The company is still required to poll creditors on the restructuring plan and get bankruptcy court approval.
All types of U.S. energy companies are suffering due to persistently low oil and gas prices. Last week, the international benchmark Brent crude was at its lowest level since 2009 when a barrel of oil was trading at $38.54 a barrel. Magnum Hunter, based in Irving, Texas, has specifically identified these reasons as to why profits were low. The company had previously looked to sell assets and raise liquidity to nullify the oil and gas market.
If you are struggling to make your company’s finances work and are considering bankruptcy as a way of managing debt, contact the Raleigh Chapter 11 business bankruptcy attorneys at the Bradford Law Offices, PLLC. Our team of experienced lawyers will be able to walk you through the bankruptcy process to further explain the impact on your personal and professional finances. For more information about how our legal services can help you, please call (919) 758-8879 today.