{"id":108358,"date":"2021-01-14T03:23:17","date_gmt":"2021-01-14T03:23:17","guid":{"rendered":"https:\/\/precoinnews.com\/?p=108358"},"modified":"2021-01-14T03:23:17","modified_gmt":"2021-01-14T03:23:17","slug":"chesapeake-energy-to-emerge-from-bankruptcy-court-as-a-5-13-billion-enterprise","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/chesapeake-energy-to-emerge-from-bankruptcy-court-as-a-5-13-billion-enterprise\/","title":{"rendered":"Chesapeake Energy to emerge from bankruptcy court as a $5.13 billion enterprise"},"content":{"rendered":"

HOUSTON (Reuters) – U.S. oil and gas producer Chesapeake Energy\u2019s Chapter 11 bankruptcy plan was approved by a U.S. judge on Wednesday, giving lenders control of the firm and ending a contentious trial.<\/p>

FILE PHOTO: A Chesapeake Energy natural gas well pad rests on the hill in Litchfield Township, Pennsylvania, January 9, 2013. REUTERS\/Brett Carlsen\/File Photo<\/figcaption>

Chesapeake will emerge from bankruptcy with about $3 billion in new financing, a $7 billion reduction in debt, and $1.7 billion cut from gas processing and pipeline costs.<\/p>\n

Investors who committed last spring to back the restructuring as energy tumbled stand to benefit enormously. A rebound in energy prices raised Chesapeake\u2019s value to about $5.13 billion, the judge hearing the case said.<\/p>\n

Once the second-largest U.S. natural gas producer, Chesapeake filed for court protection last June, reeling from overspending on assets and from a sudden decline in demand and prices spurred by the coronavirus pandemic.<\/p>\n

Creditors who opposed the plan claimed Chesapeake was bankrupt long before it sought court protection and harshly criticized terms that gave backers including mutual fund giant Franklin Advisers Inc. heady returns.<\/p>\n

First-lien note holders stand to get a 130% return on their claims and Franklin 41%, but unsecured creditors will only recover about 4%, said Robert Stack, who represented unsecured creditors. The plan improperly favors a few at the expense of many, he said. His remarks drew a rebuke from bankruptcy court Judge David Jones.<\/p>\n

Chesapeake managers \u201cshould not be criticized,\u201d said Jones, \u201cthey should be complimented,\u201d citing the energy market crash. \u201cI reject the assertion that people threw caution to the wind.\u201d<\/p>\n

The plan will allow Chesapeake to emerge \u201ca stronger and more competitive enterprise,\u201d spokesman Gordon Pennoyer said.<\/p>\n

Jones refused to consider a last minute offer by an investment group led by Jefferies Financial Group to replace the financing that gave first-lien and Franklin heady returns.<\/p>\n

At the same time, Jones acknowledged his decision to allocate a significant number of share-rights to Franklin and others in exchange for their financing provided what he called a \u201cgood deal.\u201d<\/p>\n

\u201cI might have made a different decision with the benefit of hindsight,\u201d Jones said. \u201cThe fact of the matter is I didn\u2019t.\u201d<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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