By Peg Brickley
ATP Oil & Gas Corp. (ATPAQ) on Thursday pushed off a hearing on the sale of its most valuable assets to secured lenders while it fields questions about the deal from unsecured creditors and federal authorities.
Unsecured creditors want more cash in the roughly $690 million offer from secured lenders led by Credit Suisse AG (CS, CSGN.VX), while the U.S. Department of the Interior wants to know who is going to pay to clean up drilling assets in the Gulf of Mexico that the buyers are leaving behind.
The judge who must ultimately approve the sale, Judge Marvin Isgur, also had questions for ATP and its proposed new owners at a Thursday hearing in the U.S. Bankruptcy Court in Houston. What happens, for example, if the small cash component of the $45 million purchase price isn't enough to buy out creditors who hold liens senior to those of the secured lenders?
Coming up with answers to that question and others will be the goal of talks that started soon after a Tuesday auction produced a declaration that the secured lenders had won.
Judge Isgur set a May 23 hearing to review results of the auction. Three other bidders showed up to vie with ATP's lenders for some assets, but none were interested in taking over a large package.
ATP filed for Chapter 11 bankruptcy protection last year, loaded with debt and operational issues following a drilling moratorium ordered after the 2010 Deepwater Horizon catastrophe in the Gulf of Mexico.
Credit Suisse is offering to cancel about $650 million worth of bankruptcy loans in order to get ATP's Telemark and Clipper projects, some choice shelf assets, and stakes in oil-and-gas operations in the Netherlands and Israel, among other assets.
Besides the question of how much secured lenders will have to pay to shake off senior liens on the acquired assets, discussions over the next few weeks will address the question of how much cash lenders will have to add to pay for assets that aren't part of their loan-collateral package, lawyers said.
Then there is the cost of concluding the bankruptcy, which means paying for lawyers and advisers to get a Chapter 11 plan in place, or at least shut down unsold operations safely. The Credit Suisse-led buyers are leaving behind "odds and ends," mostly in ATP's shelf operations.
ATP's official committee of unsecured creditors is in discussions with the senior lenders about coming up with more money to cover the cost of winding down the operations that aren't being acquired, said Milbank Tweed Hadley & McCloy LLP's Evan Fleck, attorney for the creditor panel.
The identity of who is going to pay to get the "idle iron"--or unused drilling assets--out of the Gulf is a big worry for the Interior Department, which is also talking to the secured lenders.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to dbr.dowjones.com.)
Write to Peg Brickley at peg.brickley@dowjones.com.
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(END) Dow Jones Newswires
May 09, 2013 13:05 ET (17:05 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.
050913 17:05 -- GMT
Story ID: MAY092013_DJB_03An
Keywords: BANKRUPTCY-RELATED FILINGS, CHAPTER 11 BANKRUPTCY FILINGS & CASES, CORPORATE ACTIONS, ALL COMPANY NEWS, ENVIRONMENTAL NEWS, GENERAL NEWS, CORPORATE RESTRUCTURINGS, ENERGY, INDUSTRIAL
Symbols: ATPAQ, CFDAY, CS, CSGN.VX, MTW.XX |
