Energy Partners plan approved, conditioned on exit financing

By Jennifer Lanning Drey

Portland, Ore., Aug. 3 - Energy Partners, Ltd. received court approval of its pre-packaged plan of reorganization from the U.S. Bankruptcy Court for the Southern District of Texas, according to a Monday filing.

The company is in discussions with lenders regarding the terms of an exit facility it will enter into upon the plan effective date, according to a related news release.

The closing of the exit facility is one of the conditions to the effectiveness of the plan and the company's emergence from bankruptcy.

Under the confirmation order, conditions to the effectiveness of the plan must be satisfied by Sept. 10 or a later date agreed to by the company and the noteholders or as set by the court.

Under the terms of the plan, holders of Energy Partners' senior notes will receive their share of 95% of the outstanding common stock in the reorganized company.

Current stockholders will receive the remaining 5%.

"The court's confirmation of Energy Partners' plan is a major milestone in what has been a very efficient and productive restructuring process," Alan D. Bell, Energy Partners' chief restructuring officer, said in the release.

"Our operations are strong, and we look forward to emerging from this process with a much improved capital structure."

Creditor treatment

Under the plan of reorganization:

• Holders of administrative claims, priority tax claims and priority claims will recover 100% in cash;

• Holders of secured claims will recover 100% by having their claim reinstated, paid in full in cash or satisfied with the collateral securing the claim;

• Holders of unsecured claims will recover 100% in cash or have their claim reinstated;

• Holders of the 9¾% senior notes and the company's 8¾% senior notes due 2010 will receive their share of 95% of the outstanding common stock in the reorganized company;

• Current stockholders will their share of 5% of the shares in the reorganized company; and

• Holders of other equity interests will receive no distribution under the plan.

Energy Partners, a New Orleans-based oil and natural gas exploration and production company, filed for bankruptcy on May 1. The Chapter 11 case number is 09-32957.

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