California Resources Corp. filed for bankruptcy with a plan to hand ownership to lenders, kicking off what could turn into the next wave of collapses among oil drillers and the businesses that depend on them.
Under a proposal the company negotiated with senior lenders as part of its bankruptcy planning, shareholders will be wiped out and investors holding the company’s $1.3 billion, 2017 loan will get 93% of a reorganized California Resources. Lower-ranking creditors will share 7% of the new company if they vote in favor of the proposal. The plan must be approved by U.S. Bankruptcy Judge David R Jones after lower-ranking creditors have a chance to object.
