Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Chaparral Energy Inc. files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: July 6, 2016
Key Contacts
Back
Chaparral Energy files Chapter 11
Chaparral Energy Inc., one of the largest oil and gas companies and third-biggest enhanced oil recovery operator in the U.S., has announced that it filed for Chapter 11 bankruptcy protection. According to The Wall Street Journal, Chaparral Energy, like many of its peers became the latest victim of the collapse of energy prices.
Chaparral Energy falls into insolvency
In its bankruptcy documents, the company cited the fact that it had recently failed to make interest payments to its senior bondholders. Following its 30-day grace period, it defaulted on its bonds, which meant that it owed all of its $1.6 billion debt. It currently owes $525.9 million in 7.625 percent senior notes due in 2022 to bondholders, along with $384 million in 8.25 percent senior notes owed in 2021 and $298 million in 9.875 percent owed in senior notes by 2020.
The company also stated in court documents that its financial struggles began in February after it borrowed all of the remaining funds under a $548 million credit agreement from 2010. As this move failed to build sustainable liquidity for Chaparral Energy, the company’s debts steadily grew from there on.
The reorganization plan for Chaparral Energy
Chaparral Energy stated in its initial bankruptcy plan that it plans to negotiate a debt-for-equity swap with most, if not all, of its lenders and bondholders to eliminate $1.2 billion in debt. If the company can reach an agreement, it intends to restructure its operations to emerge from bankruptcy as a viable business.
In the meantime, Chaparral will continue operations through the reorganization process.
The significance of the Chaparral Energy filing
Prior to recent Chapter 11 bankruptcy filings in the energy sector, there have been 67 companies that have sought bankruptcy protection since 2015.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
Otherwise, for more articles regarding oil companies filing for bankruptcy, check out:
- Ultra Petroleum files for Chapter 11 Bankruptcy Protection
- Goodrich Petroleum Corp. Files for Chapter 11 Bankruptcy Protection
- Venoco files for Chapter 11 Bankruptcy Protection
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.