Burro Sand files Chapter 11 plan and disclosure statement

Chicago, May 5 – Aequor Mgt LLC’s (Burro Sand) filed a disclosure statement and a Chapter 11 plan of reorganization on Friday with the U.S. Bankruptcy Court for the Eastern District of Texas.

The plan is a filing of liquidation which will consolidate the debtors and their estates, create a creditor trust, vest the trust with property and enable the trust attempt to monetize the assets to make distributions to creditors. The trust will also have an additional $250,000 in cash as partial consideration for certain releases provided under the plan.

The primary assets of Aequor Holdings are the Proterra interests and the Proterra causes of action and the primary assets of Aequor MGT are the Burro mine and the ITX equipment, consisting of mining equipment in the possession of ITX and remaining equipment consisting of land and mining equipment.

Most of the assets listed above are subject to one or more liens.

Any monetization of the assets will be used to pay secured claims and then unsecured claims.

The debtors believe that the assets will be sufficient to pay secured claims in full, but the recovery to unsecured creditors is less certain.

Class treatment

Administrative claims of $750,000 will be paid in full.

Priority claims are expected to be satisfied, currently consisting of a $118,250 claim from the Texas comptroller which is expected to be reduced to $0 once the appropriate returns are filed.

Secured property tax claims of $350,000 are impaired, but are estimated with full recovery.

ITX secured claims of $6,519,629 are impaired, but are estimated with 100% recovery.

The Castlelake secured claim of $41,221,442 is impaired, with an estimated recovery between half to full.

An IRS priority claim is expected to be satisfied. The claim is for $8,431,548, but tax experts believe that will be reduced to zero once the debtors amend their tax returns.

A DIP loan secured claim is an impaired class but the $1.5 million is expected with full recovery. The DIP loan has yet to be requested or approved by the court. To the extent approved, the company does not believe the whole of it will be drawn.

Unsecured claims of $31.2 million are impaired and their estimated recovery is unknown. They would be paid pro rata from the trust.

Subordinated claims will not be paid.

Equity interest will be canceled.

Except for the administrative claims, all classes are considered impaired and are entitled to vote on the plan.

Tyler, Tex.-based Burro Sand is a frac sand mining and processing plant. The company filed bankruptcy on Jan. 5 under Chapter 11 case number 23-60010.

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