Rockall Energy Holdings’ Chapter 11 plan effective as of June 10

By Sarah Lizee

Olympia, Wash., June 13 – Rockall Energy Holdings, LLC’s Chapter 11 plan went into effect on Friday, according to a notice filed with the U.S. Bankruptcy Court for the Northern District of Texas.

On June 2, the court confirmed the plan and simultaneously approved the sale of the debtors’ assets to Formentera Partners Fund I, LP for $85 million. The target closing date was June 8.

As previously reported, under the plan, class 3 secured parties claims were based on the occurrence or non-occurrence of a payout event, defined in the Chapter 11 plan.

The payout event meant the implementation of one or more successful bids for the debtors’ assets that would provide the debtors with enough cash to pay DIP claims in full and fund the claims reserve and the professional fee escrow account.

The terms of a potential exit facility that would fund the company’s emergence from bankruptcy would have depended on the payout event as well.

The exit facility would have needed to be in place for the company to emerge if a payout event had not happened.

Other priority claims (class 1) of $108,633 were to be unimpaired and paid in full in cash.

Other secured claims (class 2) of $2,468,192 were to be unimpaired and paid in full in cash.

The secured parties claims (class 3) of $150,147,519 were to be impaired.

They were either to receive a pro rata share of the secured parties cash payment, the beneficial interests in the liquidation trust or such other treatment as agreed by the debtors and the applicable holder of a secured parties claim if a payout event occurred.

However, if a payout event did not occur, they would receive a pro rata share of the secured parties equity distribution and the secured parties cash payment, if any; the beneficial interests in the liquidation trust (if any); or such other treatment as agreed by the debtors and the applicable holder of a secured parties claim.

The general unsecured claims (class 4) of $45,701,766 was impaired. The class was to receive either a pro rata share of the GUC global settlement agreement or the beneficial interests in the GUC trust. The cash pool was set at $3.75 million plus 3% of any net sale proceeds in excess of $130 million plus any unused amounts from the vendor pot plus any unused amounts allocated for the payments of fees of committee professionals.

A trustee was to be selected by the committee to reconcile and administer general unsecured claims and make distributions.

As part of the last amendments to the document, there was to be a waiver of any deficiency claims of the secured parties on the effective date.

All intercompany claims (class 5) of $1,320,868,526 were to be adjusted, reinstated, compromised or discharged.

Subordinated claims were impaired and were not to receive anything.

Intercompany interests (class 7) were to be adjusted, reinstated, compromised or discharged.

Rockall equity interests were to be impaired and holders were not to receive any distribution unless all senior claims had been paid in full.

Additionally, the debtors agreed to waive non-insider avoidance actions, meaning that the debtors would not, for example, pursue claims against trade vendors to avoid prepetition transfers from the debtors. The debtors are retaining claims and causes of actions against Krewe Energy, LLC and its affiliates and all rights to pursue such claims were to be transferred to the intercreditor agreement on the effective date.

The Dallas-based oil exploration and production company filed Chapter 11 bankruptcy on March 9 under case number 22-90000.

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