Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Emerald Oil Inc Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: April 11, 2016
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Emerald Oil Inc files Chapter 11
Recently, oil and gas producer Emerald Oil Inc. announced that it had filed for Chapter 11 bankruptcy protection. According to The Wall Street Journal, Emerald became just the latest victim of the collapse and subsequent sluggish recovery of oil prices. As a result, the company officials stated that Emerald intends to seek an auction sale of its remaining assets.
Emerald Oil spirals into debt
In bankruptcy documents, Emerald’s Chief Financial Officer explained that the company has halted its exploration and extraction activities. Forty percent of its workforce was let go in the aftermath of the downturn, while the company struggled to refinance its debt load on four separate attempts. Its access to capital markets was limited, which significantly reduced its reserves and dramatically decreased its corporate value.
Following the submission of its bankruptcy petition, Emerald reported over $360 million in debts to $405 million in assets. Despite the recent rebound of oil prices, the company’s long-term outlook was still negative.
Emerald Oil’s reorganization plan
According to its bankruptcy petition, Emerald plans to seek an auction sale. Latium Group has submitted an offer to purchase the company, and will serve as the stalking horse bidder in the auction. In a statement, Emerald CEO McAndrew Rudisill explained that the executive team views Latium Group’s offer as the best option for the company to emerge from the bankruptcy process as a viable business.
Prior to the auction, Emerald plans to maintain normal business operations with a $20 million loan from Latium Group. This loan is subject to court approval, but the company believes it will enable it to maintain value for potential buyers.
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.
For more related articles on oil companies filing for Bankruptcy, check out:
- Paragon Offshore Files for Chapter 11 Bankruptcy Protection
- Arch Coal Inc. files for Chapter 11 Bankruptcy Protection
- Swift Energy files for Chapter 11 Bankruptcy Protection
- Practices: Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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