Furie Operating Alaska LLC gained bankruptcy court confirmation of its third amended joint plan of reorganization, paving the way to sell its assets in the Cook Inlet Kitchen Lights unit to Anchorage based Hex LLC.
Judge Laurie Selber Silverstein signed a confirmation order of the plan June 12, following a June 11 hearing in the U.S. Bankruptcy Court for the District of Delaware.
Under the plan, Furie's secured term lenders will foreclose on Furie and related debtor companies - Cornucopia Oil & Gas Company LLC and Corsair Oil & Gas LLC - and subsequently sell the equity to Hex's designee, HEX Cook Inlet LLC for $5 million.
HEX Cook Inlet is an Alaska limited liability company formed May 11, owned 80% by Hex and 20% by Rogue Wave AK LLC.
The confirmation order authorizes the debtors to enter into and implement the "RWIO consent letter," which reflects a settlement with working interest owners - Giza Holdings LLC; Taylor Minerals LLC; Allen Lawrence Berry; the 2007 Allen Lawrence Berry Trust; and Danny Davis. The letter was filed as part of the amended plan April 19, as Exhibit C to the term sheet. The settlement will reduce the RWIO group's working interest from 20% to 10%, once the equity sale is complete, while preserving the group's overriding royalties.
The order also protects other royalty owners, stating that nothing in the plan or its documents "shall impact any rights, property, interests, claims or defenses that may exist under applicable nonbankruptcy law solely with respect to any valid overriding royalty interests in the oil and gas leases operated by the debtors."
The order addresses objections to the second amended plan of reorganization, filed June 6 by the United States on behalf of the U.S. Bureau of Customs and Border Protection, over $7.2 million owed on a prepetition Jones Act fine settlement between Furie and Customs.
"Notwithstanding any provision of the plan, this confirmation order, or any implementing or supplementing plan documents, the United States' setoff rights under federal law as recognized in Bankruptcy Code section 553, and recoupment rights, shall be preserved and are unaffected," the order said.
- STEVE SUTHERLIN
See full story in June 21 issue, available online Friday, June 19 at www.PetroleumNews.com
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