Bristow Group equity security holders object to disclosure statement

By Caroline Salls

Pittsburgh, Aug. 19 – An informal group of Bristow Group, Inc.’s equity security holders filed an objection Monday to approval of the disclosure statement for the company’s Chapter 11 plan, according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas.

“Chapter 11 was not conceived as a device to enable a debtor to evade its fiduciary duties and wipe out the interests of its shareholders in violation of applicable law,” the objection said.

“This court should not countenance unlawful and inequitable conduct which perverts the beneficial and economically necessary policies of the Bankruptcy Code into a vehicle that allows debtors and certain creditors with a bare, unsupported valuation number that is only for settlement purposes to wipe out the existing equity interests of investors who have relied upon the debtors’ multiple public filings in which a healthy and viable business with substantial existing equity was presented.”

The equity group said there is no reason to rush the disclosure statement approval process in the form of a requested conditional approval, unless the company is looking to force the equity holders to address the key issue of valuation without the required time and tools to do so.

In addition, the group said the disclosure statement does not provide enough information to allow creditors to vote on the plan because the only valuation it provides is for settlement purposes with “no basis in fact.”

The equity holders also said the disclosure statement does not explain why, before the Chapter 11 cases were filed, Bristow failed to follow through on additional financing that was offered, failed to dispose of and sell specified assets and entered into some sale transactions at a loss before promoting a plan that extinguishes existing equity.

Bristow is a Houston-based offshore transportation services provider to the oil and gas industry that filed bankruptcy on May 11. The Chapter 11 case number is 19-32713.

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