Endeavour committee wants affiliate releases cut in altered term loan

By Kali Hays

New York, April 10 – Endeavour International Corp.’s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to reconsider a Nov. 10 lender protection order, according to an April 10 motion.

The committee claims that certain protections connected to an Endeavour Energy UK Ltd. (EEUK) term loan totaling $440 million embodied within a lender protection order issued before the committee was appointed to “predetermine the possible treatment of claims of and against” some of Endeavour’s non-debtor affiliates.

Among Endeavour’s affiliates, the committee claims that EEUK is the only operating company with significant assets.

The protection order includes several of Endeavour’s pre-bankruptcy secured lenders and noteholders and Credit Suisse AG, Cayman Islands Branch as the administrative agent.

According to the motion, the lender protections undermine the committee’s and the non-debtor affiliates’ ability to “subordinate, recharacterize or substantively consolidate the non-debtor affiliates in these proceedings or any other proceedings.”

“Additionally, the lender protection order appears to release the non-debtor affiliates’ claims against the EEUK lenders (including any potential claims with respect to lien avoidance or fraudulent transfers) and potentially precludes the non-debtor affiliates from challenging the stipulations made by the debtors in these cases.”

As the non-debtor affiliates are not represented, nor have they appeared in Endeavour’s bankruptcy case, the committee argues that the bankruptcy court has no jurisdiction over any potential actions.

“Notably, these non-debtors hold the assets having most of Endeavour’s economic value. Had the committee been appointed at the time, it would have objected to the entry of the lender protection order,” the motion stated.

In consideration of its claims, the committee asked that the court enter a revised protection order removing the releases of Endeavour’s affiliates.

A hearing is scheduled for May 1.

Endeavour is a Houston-based oil and gas exploration and production company focused on the North Sea and the United States. The company filed for bankruptcy on Oct. 10, 2014 under Chapter 11 case number 14-12308.

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