UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 3, 2017

 

Bonanza Creek Energy, Inc.

(Exact name of registrant as specified in its charter)

 

     
Delaware 001-35371 61-1630631

(State or other jurisdiction of

 

incorporation)

 

(Commission

 

File Number)

 

(I.R.S. Employer

 

Identification No.)

 

   
410 17 th Street, Suite 1400  
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
       

Registrant’s telephone number, including area code: ( 720) 440-6100

 

Not Applicable

(Former name or former address, if changed since last report.)

 

________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On February 1, 2017, Bonanza Creek Energy, Inc. (the “Company”) entered into a stipulation (the “Stipulation”) with an ad hoc committee of certain holders of the Company’s 6.75% Senior Notes due 2023 and 5.75% Senior Notes due 2021 and Silo Energy, LLC (“Silo”) to, among other things, settle certain claims of Silo in connection with the previously announced cases commenced by the Company under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Court”).

 

A copy of the Stipulation is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The above description of the Stipulation is qualified in its entirety by the full text of such exhibit.

 

Item 7.01 Regulation FD Disclosure.

 

In August 2016, the Company executed various confidentiality agreements (collectively, the “Noteholder Confidentiality Agreements”) with certain holders of the Company’s 6.75% Senior Notes due 2023 and 5.75% Senior Notes due 2021 (collectively, the “Notes”) to engage in discussions regarding a possible restructuring transaction. As of the date hereof, the Noteholder Confidentiality Agreements remain in effect to permit the Company to disclose confidential information to the holders of Notes party thereto from time to time. On January 25, 2017, Bonanza Creek Energy, Inc. (the “Company”) executed various confidentiality agreements (collectively, as may be amended, restated, supplemented or otherwise modified from time to time, the “Equity Confidentiality Agreements”) with certain holders of the Company’s common stock that are members of an ad hoc committee of equity security holders (the “Ad Hoc Equity Committee”) represented by Brown Rudnick LLP.

 

Pursuant to the Equity Confidentiality Agreements, the Company agreed to publicly disclose certain information, including certain information prepared by, or by certain representatives of, the Ad Hoc Equity Committee, upon the occurrence of certain events set forth in the Equity Confidentiality Agreements, including upon the delivery of notice (the “Noteholder Notice”) by certain holders of Notes represented by Kirkland & Ellis LLP (the “Ad Hoc Noteholder Group”). In accordance with the Equity Confidentiality Agreements, the Noteholder Notice was delivered to the Company by Kirkland & Ellis LLP on February 2, 2017, prompting the disclosure set forth herein. The Company hereby discloses (a) the Company and counsel to the Ad Hoc Noteholder Group each engaged in discussions with the Ad Hoc Equity Committee relating to a restructuring proposal from the Ad Hoc Equity Committee (the “Ad Hoc Equity Committee Proposal”), (b) a summary of the Ad Hoc Equity Committee Proposal that was transmitted to the Company, and to certain members of the Ad Hoc Noteholder Group in connection with a discussion with representatives of the Ad Hoc Equity Committee, is attached hereto as Exhibit 99.1, (c) the letter dated January 30, 2017, from counsel to the Ad Hoc Equity Committee to counsel to the Debtors, attached hereto as Exhibit 99.2, and (d) the Ad Hoc Equity Committee Proposal did not result in an acceptable transaction and no counteroffer was made.

 

The information furnished in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing of the Company’s under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein by reference.

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this Current Report and in our most recent Annual Report on Form 10-K as well as in other reports filed from time to time by the Company with the Securities and Exchange Commission, most of which are beyond our control. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this Current Report are forward-looking statements. Although we believe that the forward-looking statements contained in this Current Report are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this Current Report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

 

 
 

Item 9.01 Financial Statements and Exhibits

 

     
(d) Exhibits.  
     
  10.1 Stipulation dated February 1, 2017 among the Debtors, the Ad Hoc Noteholder Group and Silo.
     
 

99.1

 

99.2 

Summary of the Ad Hoc Equity Committee Proposal

 

Letter dated January 30, 2017 from counsel to the Ad Hoc Equity Committee to counsel to the Debtors.

     
     
 
 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Bonanza Creek Energy, Inc.
   
     
Date: February 3, 2017 By: /s/ Cyrus D. Marter IV
    Cyrus D. Marter IV
    Senior Vice President, General Counsel
    and Secretary
   

 

 

 

EXHIBIT INDEX

 

Exhibit No. Description
   
   
10.1 Stipulation dated February 1, 2017 among the Debtors, the Ad Hoc Noteholder Group and Silo.
   

99.1

 

99.2

Summary of the Ad Hoc Equity Committee Proposal

 

Letter dated January 30, 2017 from counsel to the Ad Hoc Equity Committee to counsel to the Debtors.

   
   

 

 

 

Exhibit 10.1

 

 

EXECUTION VERSION

 

 

STIPULATION BY AND AMONG DEBTORS, AD HOC COMMITTEE OF UNSECURED NOTEHOLDERS AND SILO ENERGY, LLC

 

Bonanza Creek Energy, Inc. and its subsidiaries that are debtors and debtors in possession in these cases (collectively, the “ Debtors ”), 1 the Ad Hoc Committee of Unsecured Noteholders (the “ Ad Hoc Committee ”) and Silo Energy, LLC (“ Silo ” and together with the Debtors and the Ad Hoc Committee, the “ Parties ”) stipulate as set forth below.

 

WHEREAS, on December 23, 2016, each of the Debtors and the Ad Hoc Committee entered into that certain Restructuring Support and Lock-Up Agreement (the “ Restructuring Support Agreement ”);

 

WHEREAS, on January 4, 2017 (the “ Petition Date ”), each of the Debtors filed a voluntary petition with the United States Bankruptcy Court for the District of Delaware (the “ Court ”) for relief under title 11 of the United States Code (the “ Bankruptcy Code ”);

 

WHEREAS, before the Petition Date, the Debtors began the solicitation of votes on Debtors’ Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code

 

[D.I. 20] (as may be amended, supplemented or otherwise modified from time to time, the “ Prepackaged Plan ”);

 

WHEREAS, the Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to section 1107(a) and 1108 of the Bankruptcy Code;

 

WHEREAS, Debtor Bonanza Creek Energy Operating Company, LLC (“ BCEOC ”) and Silo are parties to that certain Agreement Regarding the Term Purchase of Crude Oil from

 

 

 

1 The Debtors and debtors in possession in these cases and the last four digits of their respective Employer Identification Numbers are: Bonanza Creek Energy, Inc. (0631), Bonanza Creek Energy Operating Company, LLC (0537), Bonanza Creek Energy Resources, LLC (6378), Holmes Eastern Company, LLC (5456), Rocky Mountain Infrastructure, LLC (6659), Bonanza Creek Energy Upstream LLC (6378) and Bonanza Creek Energy Midstream, LLC (6378). The Debtors’ mailing address is 410 17th Street, Suite 1400, Denver, Colorado 80202.

 

 

 

 

Bonanza Creek Energy Operating Company, LLC to Silo Energy, LLC, dated as of October 8, 2014, by and between BCEOC and Silo (the “ Silo Agreement ”);

 

WHEREAS, the Parties agreed to a settlement, the terms of which are set forth in a settlement term sheet (the “ Term Sheet ”), a copy of which was filed as Exhibit 1 to the Certification of Counsel filed on January 26, 2017 [D.I. 174]; and

 

WHEREAS, pursuant to the Term Sheet, the Debtors and Silo agreed to promptly, but no later than February 1, 2017, enter into this Stipulation.

 

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Parties:

 

1.             This Stipulation shall become effective immediately upon execution by or on behalf of each of the Parties.

 

2.             Silo shall have and be entitled to, without the need for executing or delivering additional documents, filing of a proof of claim, or entry of additional orders of the Bankruptcy Court other than the order approving this Stipulation, a general unsecured claim against BCEOC (the “ Silo Claim ”), which claim shall be allowed in the amount of $75,000,000. Silo shall receive a distribution of New Common Stock (as defined in the Prepackaged Plan) on account of such claim, unless the Debtors elect to provide such distribution in the form of cash by delivering a written notice of such election to Silo (with a copy to counsel to Silo) on or before five (5) days before the Effective Date (as defined in the Prepackaged Plan) in the amount of $2,700,000, which the Parties agree is the value of the distribution to be provided to Silo in satisfaction of the Silo Claim under Class 2D under the Prepackaged Plan.

 

3.             If, after execution of the Stipulation, the Prepackaged Plan is modified, amended or changed, either through agreement, judicial determination or order of the Bankruptcy Court, to

 

 

2  

 

increase the distribution provided to creditors classified in Class 2D under the Prepackaged Plan, the Debtors shall provide Silo with additional New Common Stock unless the Debtors elect to pay such distribution in cash by delivering written notice to Silo (with a copy to counsel to Silo) on or before five (5) days before the Effective Date, in the amount of the proportionate increase Silo would receive in respect of the Silo Claim under such modified, amended or changed Prepackaged Plan.

 

4.             Silo (a) shall retain the $5,034,516 payment (the “ Adequate Assurance Payment ”), (b) shall not be required to turn over the $8,737,539.58 payment the Debtors believe is due to BCEOC for the volumes of crude oil previously delivered to Silo by BCEOC during the month of December 2016 (the “ January Payment ”) and (c) on the Effective Date, shall receive and the Debtors will release any right, title, and interest to the Adequate Assurance Payment and the January Payment.

 

5. The Debtors shall pay $4,527,944.42 in cash to Silo on the Effective Date.

 

6.             The Debtors shall pay Silo’s reasonable and documented professional fees and expenses on the Effective Date.

 

7.             Effective on the Effective Date, the Silo Agreement shall be deemed to be duly terminated in accordance with its terms, null and void, and of no further effect.

 

8.             On the Effective Date, Silo shall waive and release its right to assert or seek payment of any administrative expense claim against any of the Debtors under section 503 of the Bankruptcy Code, or any other claim (except for the Silo Claim and the obligations due and owing under this Stipulation) against the Debtors.

 

9.            If this Stipulation is terminated, notwithstanding paragraph 4 of this Stipulation, all rights and remedies with respect to the January Payment, the Adequate Assurance

 

 

3  

 

Payment, and the Silo Agreement (including the size and priority of the Silo Claim) are reserved in all respects, and no action or inaction by any party shall waive or prejudice the rights of any Party, and, until the Stipulation is terminated, neither BCEOC nor Silo will issue any notice to cure any material breach of the Silo Agreement.

 

10.           If the Stipulation is terminated pursuant to paragraphs 14 or 15 of this Stipulation, the 9019 Motion (as defined below) is not approved at or prior to the hearing to consider confirmation of the Plan, or confirmation of the Prepackaged Plan does not occur in a manner consistent with the Stipulation, the rights of the Parties will revert to status quo in effect as of January 21, 2017, and, for the avoidance of doubt, all days from and including January 21, 2017 through and including the date of the termination of the Stipulation shall toll and not be counted for purposes of any deadlines or notice periods prescribed under the Silo Agreement.

 

11.           The Debtors shall by February 3, 2017, file a motion pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (the “ 9019 Motion ”), in form and substance reasonably acceptable to the Debtors and Silo, seeking approval by the Court of this Stipulation.

 

12.           The Ad Hoc Committee and its members (a) will support approval of the Stipulation and otherwise not encourage any person not to support approval of the Stipulation and (b) will not take any action inconsistent with the Term Sheet or the Stipulation.

 

13.           Silo shall (a) support the Prepackaged Plan, as such Prepackaged Plan may be amended in any manner not inconsistent with the terms of the Stipulation, (b) timely complete and submit a ballot voting the full amount of the Silo Claim to accept the Prepackaged Plan and not opt out of the releases provided in the Prepackaged Plan, (c) not transfer the Silo Claim without the consent of the Debtors, (d) support any amended Prepackaged Plan that is not

 

 

4  

 

inconsistent with the terms of the Stipulation, (e) not, and shall not encourage any other party, to file any pleadings or participate in any hearings before the Court, except to the extent the Debtors or another party are seeking relief inconsistent with this Stipulation and

 

(f) agree that its previously filed objection to the relief sought in certain of the Debtors’ first day motions will be deemed withdrawn.

 

14.           If (a) there is any material amendment or modification to the Prepackaged Plan, or the Prepackaged Plan is withdrawn, after entry into this Stipulation but before confirmation of the Prepackaged Plan (i) without Silo’s consent, (ii) in a manner materially inconsistent with this Stipulation, and (iii) in a manner that materially adversely affects or impacts Silo, or (b) BCEOC sells all or substantially all of its assets, Silo may, in its sole discretion, terminate its obligations under the Stipulation and, subject to paragraph 10 of this Stipulation, the rights of the Parties will revert to the status quo in effect as of January 21, 2017.

 

15.           If the Restructuring Support Agreement terminates in accordance with its terms, the Ad Hoc Committee may, in its sole discretion, terminate its obligations under this Stipulation and, subject to paragraph 10 of this Stipulation, the rights of the Parties will revert to the status quo in effect as of January 21, 2017.

 

16.           Each Party shall cooperate with each other Party and take such actions as are reasonably necessary to consummate the transactions under this Stipulation, obtain approval of this Stipulation and confirmation of the Prepackaged Plan consistent with this Stipulation.

 

17.           Effective as of the Effective Date, and without the need for execution and delivery of additional documentation, except for the Silo Claim and the obligations due and owing under this Stipulation, Silo hereby finally and forever and unconditionally releases and discharges the Debtors, the reorganized Debtors and such entities’ current and former affiliates, subsidiaries,

 

 

5  

 

officers, directors, managers, principals, employees, shareholders, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals (collectively, the “ Debtor Related Parties ”) from any and all claims, demands, actions, causes and rights of action, lawsuits, debts, sums of money, accounts, covenants, contracts, controversies, agreements, obligations, promises, trespasses, damages, judgments, executions, losses, and liabilities of any kind or nature whatsoever, whether at law, in equity, or otherwise, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed, disputed or undisputed, liquidated or unliquidated, matured or unmatured, and whether or not accrued, and whether or not asserted or assertable in law, equity, or otherwise, for, upon, or by reason of any act, omission, or other matter, cause, or thing whatsoever, related to or arising from the Silo Agreement, which Silo ever had, may have had, or now has against the Debtors, the Reorganized Debtors (as defined in the Prepackaged Plan), or any of the Debtor Related Parties.

 

18.           Effective as of the Effective Date, and without the need for execution and delivery of additional documentation, Silo hereby finally and forever and unconditionally releases and discharges the Ad Hoc Committee and the Ad Hoc Committee’s current and former affiliates, subsidiaries, officers, directors, managers, principals, employees, shareholders, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals (collectively, the “ Ad Hoc Committee Related Parties ”) from any and all claims, demands, actions, causes and rights of action, lawsuits, debts, sums of money, accounts, covenants, contracts, controversies, agreements, obligations, promises, trespasses, damages, judgments, executions, losses, and liabilities of any kind or nature whatsoever, whether at law, in equity, or otherwise, whether known or unknown, contingent or absolute, suspected or

 

 

6  

 

unsuspected, disclosed or undisclosed, hidden or concealed, disputed or undisputed, liquidated or unliquidated, matured or unmatured, and whether or not accrued, and whether or not asserted or assertable in law, equity, or otherwise, for, upon, or by reason of any act, omission, or other matter, cause, or thing whatsoever, related to or arising from the Silo Agreement, which Silo ever had, may have had, or now has against the Ad Hoc Committee or any of the Ad Hoc Committee Related Parties.

 

19.           Effective as of the Effective Date, the Debtors, the reorganized Debtors and the Ad Hoc Committee, including the members of the Ad Hoc Committee, and on behalf of or for the benefit of any of the foregoing directly or derivatively, hereby finally and forever and unconditionally release and discharge Silo and Silo’s current and former affiliates, subsidiaries, officers, directors, managers, principals, employees, shareholders, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals (collectively, the “ Silo Related Parties ”) from any and all claims, demands, actions, causes and rights of action, lawsuits, debts, sums of money, accounts, covenants, contracts, controversies, agreements, obligations, promises, trespasses, damages, judgments, executions, losses, and liabilities of any kind or nature whatsoever, whether at law, in equity, or otherwise, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed, disputed or undisputed, liquidated or unliquidated, matured or unmatured, and whether or not accrued, and whether or not asserted or assertable in law, equity, or otherwise, for, upon, or by reason of any act, omission, or other matter, cause, or thing whatsoever, related to or arising from the Silo Agreement, which the Debtors or the Ad Hoc Committee ever had, may have had, or now or hereafter have against Silo or any of the Silo Related Parties.

 

 

7  

 

20.           This Stipulation shall constitute the full and entire agreement amongst the Parties with regarding to the subject herein. For the avoidance of doubt, this Stipulation shall supersede the Term Sheet.

 

21.           This Stipulation shall not be modified, altered, amended, or vacated without the prior written consent of the Parties. Any such modification, alteration, amendment, or vacation, in whole or in part, shall be subject to the approval of the Court.

 

22.           This Stipulation may be executed in counterparts, each of which is deemed an original, but when taken together constitute one and the same document.

 

23.           This Stipulation shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the principles of conflicts of law and applicable federal law, including not limited to the Bankruptcy Code.

 

24.           The Parties are authorized to take all actions necessary to effectuate the relief granted pursuant to this Stipulation. The Court shall have exclusive jurisdiction with respect to all matters arising from or related to the interpretation, implementation or enforcement of this Stipulation, and the Parties hereby consent to such jurisdiction to resolve any disputes or controversies arising from or related to this Stipulation. Any motion or application brought before the Court to resolve a dispute arising from or related to this Stipulation shall be brought on notice as provided by and in accordance with the Bankruptcy Rules and the Local Rules.

 

[ Signature page follows ]

 

 

8  

 
Dated: Denver, Colorado Dated: Tulsa, Oklahoma
  February 1, 2017   February 1, 2017
       
       
  BONANZA CREEK ENERGY,   SILO ENERGY, LLC
  INC.    
       
  410 17th Street, Suite 1400   6733 S. Yale Avenue
  Denver, Colorado 80202   Tulsa, Oklahoma 74136
       
    By: Kaiser Midstream, LLC,
      its Manager

 

       
By: /s/ Cyrus D. Marter IV By: /s/ John Boone
Name: Cyrus D. Marter IV Name: John Boone
Title: Senior Vice President, General Title: President
  Counsel and Secretary    
       
Dated: Chicago, Illinois    
  February 1, 2017    

   

 

 

THE AD HOC COMMITTEE OF

UNSECURED NOTEHOLDERS

 

300 North LaSalle

Chicago, Illinois 60654

  		   
By: /s/ Steven N. Serajeddini
Name: Steven N. Serajeddini
Title: Counsel to the Ad Hoc Committee
       

 

 

 

9  

 

Exhibit 99.1

 

 

Summary of Ad Hoc Equity Committee Proposal

 

  Noteholder Proposal Equity Group Proposal
Equity Allocation

Notes: 95.5%

Equity: 4.5%

Notes: 80%

Equity: 20%

Warrants Pro-rata share to acquire 7.5% of equity at $1.45bn equity value; 3 year duration 25% of warrants at par plus accrued of notes; 5 year duration
Rights Offering

Size: $200mm

Split: fully backstopped by Notes

UOP: general corporate / allowed administrative expense

Size: $300mm

Split: $200mm for Notes / $100mm for Equity; proportional share of backstop fee

UOP: general corporate / allowed administrative expense / other GUCs in cash

 

 

 

 

Exhibit 99.2

 

 

 

BENNETT S. SILVERBERG

direct dial: (212) 209-4924

fax: (212) 938-2924

bsilverberg@brownrudnick.com

 

 

 

January 30, 2017

 

 

 

 

VIA EMAIL

 

Mr. Marshall S. Huebner

David Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

 

 

RE: Bonanza Creek Energy, Inc.

 

Dear Marshall:

 

As you are aware, our firm represents the Ad Hoc Committee of Equity Security Holders of Bonanza Creek Energy, Inc. (the “ Ad Hoc Equity Committee ”). The members of the Ad Hoc Equity Committee currently hold 34% of the issued and outstanding common stock of Bonanza Creek Energy, Inc. (“ BCEI ”) and requests to join our group suggest that this percentage is likely to increase.

 

In BCEI’s Reply to Limited Objection of the Ad Hoc Equity Committee to the Motion of Debtors for Entry of Interim and Final Orders Pursuant to Bankruptcy Code Sections 105(a), 361, 362, 363, 503, and 507, Bankruptcy Rules 2002, 4001, 6004, and 9014, and Local Rule 4001-2 (I) Authorizing the Debtors to Utilize Cash Collateral, (II) Granting Adequate Protection to Prepetition Secured Parties, (III) Modifying the Automatic Stay, (IV) Scheduling a Final Hearing and (V) Granting Related Relief , dated January 29, 2017 [Docket No. 200], the Debtors invited the Ad Hoc Equity Committee to propose an alternative transaction.

 

In response, the Ad Hoc Equity Committee is prepared to immediately engage in discussions with the Debtors regarding the terms of an alternative transaction (the “ Alternative Transaction ”). A key component of the Ad Hoc Equity Committee’s Alternative Transaction is a rights offering proposal (the “ Alternative Rights Offering ”) pursuant to which the Ad Hoc Committee’s members are prepared to backstop a larger rights offering by at least $100 million PLUS put that increased new money in at a higher valuation than the rights offering currently contemplated by the Debtors’ Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated as of December 23, 2016 (the Prepackaged Plan ”) 1 . The larger Alternative Rights Offering would provide the Debtors with additional capital to enable the Debtors to pursue their business plan or make payments to BCEI’s creditors under a chapter 11 plan. Moreover, the Ad Hoc Equity Committee is prepared to permit all holders of BCEI’s common stock to participate in the Alternative Rights Offering.

 

 

 

1 Defined terms not defined herein shall have the meaning ascribed to such terms in the Prepackaged Plan.

 

 

 
 

 

 

 

 

 

The treatment of all other classes of claims and interests under the Alternate Transaction would remain substantially the same as under the Prepackaged Plan with the following exceptions:

 

· Holders of Notes Claims shall be satisfied in full through a combination of cash, debt and/or take back equity.

 

· Holders of Existing Equity Interests will receive, in addition to the right to participate in the Alternate Rights Offering, a combination of New Common Stock and Warrants at an enhanced value to that offered in the Prepackaged to reflect fair valuation.

 

In addition, the Alternate Transaction would not disturb any of the settlements reached with NGL Crude Logistics, LLC or Silo Energy, LLC.

 

We look forward to working with BCEI to further develop the terms of the Alternate Transaction and submit that this bona fide offer enables the Debtors to immediately exercise their right to “fiduciary stop, look and listen” under the Restructuring Support Agreement to further negotiate the terms of an acceptable Alternative Transaction. Please contact us at your convenience to facilitate such further discussions.

 

Sincerely,

 

BROWN RUDNICK LLP

 

/s/ Bennett S. Silverberg        

Bennett S. Silverberg

 

cc: Brian M. Resnick