Bonanza Creek trustee appointment motion opposed by company, creditors

By Caroline Salls

Pittsburgh, March 7 – Bonanza Creek Energy, Inc., an informal group of its unsecured noteholders and administrative agent KeyBank NA objected to a motion filed by an informal equity committee for an appointment of a Chapter 11 trustee or examiner for Bonanza Creek’s case, according to Tuesday filings with the U.S. Bankruptcy Court for the District of Delaware.

“It is no secret that the debtors and the ad hoc equity committee disagree on the valuation of the debtors,” Bonanza Creek said in its objection.

“But, as this court has previously held, that is an entirely insufficient basis on which to seek appointment of either a trustee or an examiner and is instead a matter to be resolved at confirmation.”

The company said the motion “boils down to a simple disagreement over plan value,” and the equity committee has been given complete freedom to explore that issue through extensive discovery.

In addition, Bonanza Creek said appointment of a trustee or examiner would be duplicative, would waste estate resources and would delay its bankruptcy cases.

In their objection, the unsecured noteholders said Bonanza Creek is on the precipice of confirming a plan that has unanimous creditor support.

“The only remaining objection to this value-maximizing outcome is by equity holders that, as the debtors will show at confirmation, are out-of-the-money by hundreds of millions of dollars,” the noteholders said.

“No amount of ‘investigating’ by a trustee or examiner will change that fact.”

Meanwhile, KeyBank called the equity committee’s motion “simply an attempt to derail the debtors’ plan confirmation process and increase expenses on parties in interest to manufacture maximum leverage for the equity committee.”

“No basis exists for this extraordinary and costly remedy, and the prepetition secured parties should not have to fund it.”

The Denver-based oil and natural gas company filed bankruptcy on Jan. 4. The Chapter 11 case number is 17-10015.

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