Chieftain Sand wins preliminary OK of plan and disclosure statement

By Caroline Salls

Pittsburgh, July 25 – Chieftain Sand and Proppant, LLC received preliminary court approval of its combined plan and disclosure statement, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The combined plan confirmation and disclosure statement approval hearing is scheduled for Sept. 14.

As previously reported, Chieftain Sand’s asset sale closed on May 26, and the buyer paid $35.25 million for the assets and assumed related liabilities.

In accordance with previous court orders, the company said $31.2 million of the sale proceeds were distributed to pre-bankruptcy lender parties. Additional distributions were made to satisfy cure amounts, priority taxes and other agreed upon obligations.

Chieftain Sand said about $1.89 million remains in its bank account to satisfy outstanding professional fees, wind down obligations and related severance and paid time off for former employees.

The company said the assets of the post-effective-date debtors will include an estimated $1.14 million of cash on hand, causes of action, any tax refunds, all rights of setoff and recoupment and other defenses that the debtors and estates may have in connection with claims and insurance policies and the proceeds related to those insurance policies.

Under the liquidating Chapter 11 plan, assets already liquidated or to be liquidated over time will be distributed to holders of allowed claims.

An administrator will be appointed to implement the terms of the plan and make distributions.

Under the plan, priority claims will be paid in full in cash.

Holders of lender secured claims will receive any excess cash after completion of the winding down of the Chieftain Sand debtors and their estates and all payments and expenses related to the winddown have been satisfied.

The holder of a Knapp Railroad Builders, Inc. mechanic’s lien/secured claim will receive cash in an amount agreed to by the parties.

Holders of general unsecured claims, intercompany claims and equity interests will receive no distribution.

New Auburn, Wis.-based Chieftain is a privately owned producer of hydraulic fracturing sand. The company filed for bankruptcy on Jan. 9, 2017 under Chapter 11 case number 17-10064.

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