Cypress Environmental’s first-day motions OK’d, plan hearing set

By Sarah Lizee

Olympia, Wash., May 11 – Cypress Environmental Partners, LP received court approval of its first-day motions from the U.S. Bankruptcy Court for the Southern District of Texas, according to a Wednesday press release.

As previously reported, the company filed bankruptcy on Sunday after having lined up a restructuring support agreement with Argonaut Private Equity, a private equity firm and the sole senior secured lender of the company. Argonaut has agreed to vote in favor of a joint pre-packaged plan of reorganization of the company and its subsidiaries.

The RSA and the plan contemplate a debt-to-equity recapitalization transaction, whereby Argonaut will receive 100% of the new equity interests of the reorganized company in exchange for extinguishing the debt to Argonaut remaining under the company’s credit agreement.

In addition, the plan provides for the payment in full of priority claims, trade claims and unsecured claims, and an equity commitment from Argonaut to provide working capital to the reorganized company upon emergence.

Argonaut has also agreed to provide a $5 million debtor-in-possession loan to Cypress to fund operations. The facility bears interest at 9% and matures in three months. The loan is subject to court approval.

The court scheduled a hearing for June 21 to consider both Cypress’ prepetition solicitation and confirmation of its pre-packaged plan of reorganization.

“With this important first step, we hope to have our plan confirmed before the end of June to allow our valuable employees to no longer be distracted so that they may solely focus on serving our customers,” Peter C. Boylan III, chairman, president and chief executive officer of Cypress, said in the Wednesday release.

Tulsa, Okla.-based Cypress Environmental Partners provides environmental services to the utility and energy industries. The Chapter 11 case number is 22-90039.

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