Judge to Confirm Linn Energy’s Bankruptcy Plan

by San Antonio Attorney

Linn Energy LLC’s plan to slash its $5.5 billion debt and dividing the company into two will get the bankruptcy judge’s confirmation soon.  The company was expected to file the final version of its bankruptcy plan on Jan.  25.

U.S.  Bankruptcy Judge David Jones has said that he is ready to confirm its restructuring plan with minor changes.  He congratulated the company’s legal team and attorneys for finding the middle ground with its major stakeholders, saying that restructuring would be difficult without the plan.

The judge added that he looks forward to a final version of the plan.

Once the plan is confirmed, the bankruptcy case of Linn will be put to an end.  The company suffered from an atrocious two-year fall in oil prices.

The company sought for bankruptcy protection in May and had been in talks with stakeholders for months to determine how to divide assets with its subsidiary, the Berry Petroleum Co LLC.

In 2013, the energy company bought Berry for $4.3 billion, generating one of the biggest independent energy producers.

The company’s bankruptcy plan will make Berry an independent business.  Linn is going to eliminate almost $4.3 billion of its $6 billion debt.  Berry is going to slash almost $1.2 billion of its $1.7 billion debt.

The disagreements between the two companies have also been resolved.  Financing have been obtain to keep the business going once they exit from bankruptcy.

Linn has a $530 million rights offering for its noteholders.

Berry has set up rights offering valued at $300 million guaranteed to unsecured noteholders.

The offerings are going increase the stakes of the noteholders in the companies, which are going to receive fresh capital.

Linn and Berry are going to leave bankruptcy with prices of oil having around twice the amount from year-ago at $26 per barrel, whereas prices are well below its highest price in 2014, which was $100 per barrel.

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