Notes trustee: Forbes Energy Services plan set to take effect April 13

By Caroline Salls

Pittsburgh, April 13 – Forbes Energy Services Ltd.’s plan of reorganization was scheduled to take effect on April 13, according to a notice released by the indenture trustee for the company’s 9% senior notes due 2019.

Forbes Energy’s pre-packaged plan was confirmed on March 29 by the U.S. Bankruptcy Court for the Southern District of Texas.

Indenture trustee Wells Fargo Bank, NA said the company’s estate will distribute 5.25 common shares of reorganized Forbes and $20 million in cash to the noteholders, resulting in distributions of 18.75 shares and $71.428571 in cash per $1.000 of outstanding principal amount of notes.

Since there will be insufficient distributions to satisfy the entire outstanding principal amount of the notes, the trustee said no portion of the distributions to noteholders will be allocated to interest.

Also under the plan, existing equity interests, including common and preferred stock, will be extinguished without recovery;

Holders of allowed general unsecured claims, including ordinary course trade vendors, but excluding holders of the senior unsecured notes, will be paid in full in the ordinary course of business or otherwise have their rights reinstated.

Some holders of the senior unsecured notes will make available to the reorganized company a $50 million new first-lien term loan facility, which will be backstopped by noteholders who executed a Dec. 21 agreement.

The company’s loan and security agreement with Regions Bank will be terminated, and a credit facility to be negotiated and entered into with Regions Bank on the plan effective date will cover letters of credit and bank product obligations.

Forbes Energy, an Alice, Texas, oilfield services company, filed bankruptcy on Jan. 22. The Chapter 11 case number is 17-20023.

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