You're in Bankruptcy. The Judge Is Angry. What Else Could Go Wrong?by
Criminals sent a company e-mail to wire themselves the money
New system for wire transfers: on paper, signed with a pen
Did we mention we lost about $2 million?
KKR & Co.’s bankrupt driller, Samson Resources Corp., had some bad news for the judge Tuesday afternoon. The oil slump had already forced it to scrap a reorganization plan. The CEO had quit. Now hackers had made off with $1.8 million, using a fake company e-mail to wire themselves the money.
Company attorney Joshua A. Sussberg opened a routine bankruptcy court hearing by saying he had to add “one unfortunate incident” to the list of woes the company is facing. On Nov. 17, he said, hackers sent out an e-mail under the name of a top executive requesting a wire transfer. Before anyone noticed the fraud, the money was gone.
Working with its bank, Samson located and froze all but $300,000 or so of the missing $1.8 million. It will rely on its insurance to get the rest back.
Even that’s complicated. Samson must first negotiate an agreement to absolve its bank of responsibility.
Samson is “working to institute and implement a policy so this never happens again,” Sussberg said. The first step: All future wire transfers must be requested on paper and signed with a pen.
The FBI is investigating, he said, adding that he didn’t know whether the hackers had been identified. The loss won’t affect Samson’s ability to operate, he said. The company is trying to reduce its $4.2 billion debt.
Samson, of Tulsa, Oklahoma, filed for bankruptcy protection Sept. 16, announcing a deal with creditors that it said would lead to quick court approval for a reorganization. Two days later, Judge Christopher Sontchi, whose approval Samson needs, announced that he was “furious” at the company for demanding that he approve side deals to protect the collateral of senior lenders.
A month later, Chief Executive Officer Randy Limbacher decided to quit rather than face the “daily grind of leading this company through the market downturn,” company attorney Ross Kwasteniet said. Limbacher will step down in mid-December and be replaced by Chief Operating Officer Richard Fraley, Sussberg said Tuesday.
Around the same time, the creditors who had agreed to trade their debt for ownership backed out of the deal, upending Samson’s aim to win approval of a reorganization plan in December. Last month, Judge Sontchi shot down the company’s request to pay Limbacher a $760,000 bonus for work he did before he decided to quit. The case won’t go to Judge Sontchi for final approval by Dec. 15, as the company had expected it would under the deal with creditors.
Sontchi did approve the company’s request to hire PricewaterhouseCoopers LLP as an "internal control servicer" -- a request it made on Nov. 17, the same day as the hack.
The case is In re Samson Resources Corp., 15-bk-11934, U.S. Bankruptcy Court, District of Delaware (Wilmington).