Agilon Energy Holdings receives confirmation of Chapter 11 plan

By Sarah Lizee

Olympia, Wash., June 7 – Agilon Energy Holdings II LLC’s Chapter 11 plan was confirmed on Tuesday by the U.S. Bankruptcy Court for the Southern District of Delaware, according to court documents.

As previously reported, the plan was recently amended to incorporate a settlement with the official committee of unsecured creditors for the benefit of all general unsecured claimholders.

According to a redline version of the plan filed Tuesday, a litigation trust will be established for the benefit of general unsecured claimholders. The initial cash amount of the trust will be $125,000, to be funded by the debtors on the effective date.

As beneficiaries of the trust, general unsecured claimholders will receive a pro rata share of the litigation trust beneficial interests, which will entitle each holder to a pro rata distribution from the cash proceeds, if any, of the retained claims and causes of action, net of litigation trust expenses.

Now, the committee will have a say regarding the debtor’s wind-down budget. Before, only the debtors and pre-bankruptcy lenders had agreed to the budget.

Additionally, the prepetition senior secured lenders and the debtor-in-possession secured parties are no longer deemed released parties or exculpated parties.

Unchanged terms

As previously reported, a previously amended version of the plan expanded the released parties to include holders of claims that are eligible to vote on the plan, but the released parties should not include non-debtor affiliates, former officers, former directors, former employees, former members and former managers.

It also reduced the recovery estimate to 56.7% for the allowed prepetition senior secured claims from 60.5%.

The amendments specified that the residual sales proceeds should not be less than $29,652,326, down from $31,625,000.

As reported, the company sold substantially all its assets to TXCR Acquisition Co., LLC for $75.5 million. After closing the sale, the debtors ceased operations and generating income. Its DIP facility was paid in full.

The plan will be funded by the cash collateral of the prepetition senior secured parties in line with a wind-down budget and by the contribution to the estates by the prepetition senior secured parties of the retained claims and causes of action otherwise subject to their adequate protection claims and liens.

Holders of administrative, professional fee and priority tax claims will be paid in full in cash.

Holders of prepetition senior secured claims will receive residual sales proceeds. To the extent of any deficiency following the application of the residual sales proceeds, holders will receive prepetition senior secured deficiency claims, which will be treated as general unsecured claims.

Holders of priority mechanic’s lien claims will receive payment in full.

Holders of other secured claims will receive the collateral securing their claims or other treatment agreed to between the holders and plan administrator.

Holders of priority unsecured non-tax claims will receive payment in full in cash.

Interests will be canceled with no distribution.

The Houston-based energy company filed bankruptcy on June 27, 2021 under Chapter 11 case number 21-32156.

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