Seventy Seven Energy Cleared to Exit Bankruptcy, Borrowing $100M!

Can you spare a dimeIn June MDN told you that Seventy Seven Energy (SSE), the old Chesapeake Oilfield Operating unit that was spun into its own company a few years ago, filed a “pre-packaged” bankruptcy plan that screws shareholders by devaluing their shares to worthless status and converting the company’s considerable outstanding debts into new shares of ownership (see Seventy Seven Energy Officially Files for Prepackaged Bankruptcy). In a little over a month, the judge assigned to case has approved that plan, along with a plan for SSE to borrow an additional $100 million. Wait, what?? The company just converted a boatload of debt into equity (bonds and IOUs into shares of stock), and they turn around and borrow ANOTHER $100 million! Yep. That’s what’s happening…

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