PostRock Files Chapter 11 Bankruptcy

by San Antonio Attorney

PostRock Energy Corp, along with its subsidiaries, filed for Chapter 11 bankruptcy under the United States Bankruptcy Code through the United States Bankruptcy Court in Oklahoma last April 1.  This move is a joint effort to have an orderly auction of the company’s assets.

The company revealed in a statement that after thorough exploration of possible alternatives and advice from the legal and financial committee, PostRock’s board of directors and secured lenders, the best decision would be to conduct a sale of PostRock’s assets through a filing of Chapter 11 bankruptcy.  This move is feasible as it is a cost-efficient way to maximize value to its creditors.

This sale is not an assurance that there will be company recovery for the stockholders.  The stockholders have been forewarned that there is a possibility for a lost investment.

The company’s board of directors has resigned and this will be effective after a trustee will be appointed in bankruptcy.

Interim president and Chief Executive Officer Clark Edwards said in an interview that after a comprehensive review of possible ways to save the company, along with a consultation with secured lenders, directors and management team they have decided that this bankruptcy filing will promote a good outcome for the company and its creditors.

Edwards thanked everyone especially their workers, suppliers and service providers for their unrelenting support.

Due to the decline of oil prices and inconsistencies in the energy market, the company’s operations were severely affected.  PopRock’s production site is located in Cherokee Basin, a region consisting of 15 counties in the Southeast part of Kansas and Northeast part of Oklahoma.

The company owns more than 2,500 wells and 2,200 miles of gas lines in the basin.  They also have a branch in the Appalachian Basin that operates minor oil and gas properties.

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