Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Geokinetics Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: March 26, 2013
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Geokinetics, a provider of seismic data, has filed for bankruptcy law protection under Chapter 11 of the Bankruptcy Code in Wilmington, Delaware. The voluntary bankruptcy will help the company accomplish its previously announced financial restructuring.
The Houston-based corporation listed $12 million in assets and $351 million in liabilities. However, an agreement with the holders of more than 70 percent of its secured notes will enable Geokinetics to convert roughly $300 million of debt to equity. The company has also secured $25 million in debtor-in-possession financing from senior note holders to facilitate the bankruptcy process.
Furthermore, the company has submitted a prepackaged bankruptcy plan – which is subject to court approval – that will ensure that all unsecured creditors are paid in full once the plan is confirmed. The company said it has received overwhelming support from its stakeholders, and expects the bankruptcy court to approve the plan within 45 days.
“Today we have taken a decisive step to strengthen our balance sheet and emerge a stronger company that is well-positioned for growth on the horizon in all three product lines and enhances profitability, while maintaining our commitments to our customers, employees, and vendors,” said David Crowley, president and CEO of Geokinetics.
Geokinetics decided to restructure its company after it missed a $14.6 million interest payment due December 15 on the secured notes.
The company also noted that it plans to continue normal business operations and does not expect the restructuring to interrupt any aspect of its operations. It has petitioned the bankruptcy court to approve the payment of wages, salaries, and other employee benefits, as well as payments to certain critical vendors, including foreign vendors.
The corporation is currently the largest Western contractor that acquires and processes seismic data and provides multi-client seismic data to the oil and gas industry worldwide.
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