Geokinetics Wins Approval of Its Reorganization PlanMichael Bathon
Geokinetics Inc., a provider of seismic data for oil and gas companies, won court approval of its prepackaged bankruptcy reorganization plan in less than 50 days, paving the way to exit court protection.
U.S. Bankruptcy Judge Kevin J. Carey at a hearing yesterday in Wilmington, Delaware, approved the debt-for-equity swap plan hashed out with creditors prior to the bankruptcy filing, according to court documents.
The company, founded in 1980, filed for bankruptcy protection due to losses from project delays and lawsuits over four storm-related deaths in the Gulf of Mexico.
Geokinetics, based in Houston, listed $12.1 million in assets and $351 million in debt in its Chapter 11 filing on March 10. The company reported assets of $392.9 million and debt of $593.5 million in a March 28 filing with the Securities and Exchange Commission disclosing its fiscal 2012 results.
Under the restructuring plan holders of 9.75 percent senior secured notes will exchange about $300 million in debt for all of the reorganized company’s equity for a projected recovery of about 70 percent. The reorganized company’s equity is expected to be valued at $224 million, according to the disclosure statement, an outline of the plan. The plan received support from 85 percent of the noteholders before the bankruptcy filing.
The $25 million loan provided by some noteholders to help support operation while in bankruptcy will also be repaid with new stock, according to court documents.
Unsecured creditors owed as much as $13.2 million will be paid in full, court papers show. Senior preferred stockholders, who also voted to accept the plan prior to the bankruptcy, will get a $6 million cash payment for a recovery of about 4 percent on their $141 million in claims. Junior preferred and common shareholders won’t receive any distribution under the plan and will be canceled.
The case is In re Geokinetics Inc., 13-bk-10472, U.S. Bankruptcy Court, District of Delaware (Wilmington).