ATP Oil & Gas trustee looks to use cash collateral to avoid default

By Caroline Salls

Pittsburgh, March 6 – ATP Oil & Gas Corp.’s Chapter 7 trustee requested court approval to use $344,982 in cash collateral to make payments related to the company’s Israeli assets, according to a motion filed March 3 with the U.S. Bankruptcy Court for the Southern District of Texas.

Chapter 7 trustee Rodney D. Tow said a request for the use of cash collateral made at the end of 2016 was denied by the court after ATP’s debtor-in-possession financing agent did not receive sufficient direction from the DIP lenders to support or oppose the request.

Tow said he is renewing his motion for an order allowing payment of an amount in arrears because “new facts have emerged since the court denied the original motion on Feb. 13.”

Specifically, Tow said ATP must pay the amount in arrears before Isramco and other tract interest holders make a final decision on an investment in a drilling program in order to avoid being deemed in default or “non-participatory” under the related agreements.

Isramco is expected to reach a final investment decision regarding the proposed drilling program by the end of the first quarter, the motion said.

The trustee said he was notified that DIP lenders holding more than 66⅔% of the outstanding DIP facility support the renewed motion and gave the agent instructions to support the request.

Houston-based ATP Oil & Gas is an offshore oil and gas development and production company focused in the Gulf of Mexico, the Mediterranean Sea and the North Sea. The company filed for bankruptcy on Aug. 17, 2012 under case number 12-36187.

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