Dela. Court Approves Magnum Hunter Bankruptcy Restructuring Plan

|
mhrThe long, slow process of "reorganizing" and emerging from bankruptcy just sped up for Magnum Hunter Resources (MHR). The Marcellus/Utica driller filed for bankruptcy protection in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Two weeks later the Delaware court, where MHR filed, approved MHR's initial plan (see Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions). Now, four months later, that same court has given its full approval for the restructuring plan. What is the plan? Essentially MHR will convert outstanding debt held by lenders in a series of "notes" or what we call IOUs, into ownership equity. Noteholders will not be reimbursed the money they invested--instead they will be given shares of stock that they can later cash in to recoup their investments. What about existing common stockholders? MHR doesn't say, but going by our story yesterday about Seventy Seven Energy's plans to do the same thing, the value of common stockholders' shares become essentially worthless (see Seventy Seven Energy Filing for Bankruptcy, Converting Debt into Stock). Here's the MHR announcement about the court approving their plan...

To view this content, log into your member account. (Not a member? Join Today!)