Item
1.03
Bankruptcy or
Receivership
.
On May
17, 2009, TXCO Resources, Inc., a Delaware corporation (the "Company"), and its
subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief
(collectively, the "Bankruptcy Filing") under chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
for the Western District of Texas (the "Bankruptcy Court"). A copy of
the press release announcing the filing is attached as Exhibit 99.1 to this
report and incorporated by reference herein.
The
Debtors' chapter 11 cases (the "Cases") are being jointly administered by the
Bankruptcy Court as Case No. 09-51807 through Case No. 09-51817. The
Debtors are continuing to operate their business as debtors-in-possession under
the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code.
In
addition to the Company, the Debtors are comprised of TXCO Energy Corp., a Texas
corporation, Eagle Pass Well Services, L.L.C., a Texas limited
liability company, TXCO Drilling Corp., a Texas corporation, Texas Tar Sands,
Inc., a Texas corporation, Charro Energy, Inc., a Texas corporation, Output
Acquisition Corp., a Texas corporation, OPEX Energy, LLC, a Texas limited
liability company, PPL Operating, Inc., a Texas corporation, Maverick Gas
Marketing, Ltd., a Texas limited partnership, and Maverick Dimmit Pipeline,
Ltd., a Texas limited partnership.
TXCO
filed a motion with the Bankruptcy Court for an interim order seeking approval
of an anticipated debtor-in-possession financing pursuant to a Summary of Terms
and Conditions with potential DIP lenders (the "DIP Term Sheet"). The DIP Term
Sheet contemplates that certain lenders would provide to TXCO
debtor-in-possession financing (the "DIP Facility") composed of a multiple draw
term loan facility in an aggregate principal amount of up to $32,000,000 (the
"Total Commitment"), with an initial $12,500,000 anticipated to be made
available on an interim basis subject to the fulfillment by TXCO of specified
conditions precedent, including entry by the Bankruptcy Court of an interim
order. The anticipated commitment of the DIP lenders to provide DIP loans under
the DIP Facility is subject to a number of conditions, including entry by the
Bankruptcy Court of an interim order and completion of loan documentation
satisfactory in form and substance to the DIP lenders. There can be no assurance
that TXCO will be able to obtain financing on the terms proposed in the DIP Term
Sheet or at all.
As a
result of the Bankruptcy Filing, the Debtors are periodically required to file
various documents with, and provide certain information to, the Bankruptcy
Court, including statements of financial affairs, schedules of assets and
liabilities, monthly operating reports and other financial
information. Such materials will be prepared according to
requirements of federal bankruptcy law and may in some cases present information
on an unconsolidated basis. While they would accurately provide
then-current information required under federal bankruptcy law, such materials
will contain information that may be unconsolidated and will generally be
unaudited and prepared in a format different from that used in the Company's
consolidated financial statements filed under the securities
laws. Accordingly, the Company believes that the substance and format
of such materials do not allow meaningful comparison with its regular
publicly-disclosed consolidated financial statements. Moreover, the
materials filed with the Bankruptcy Court are not prepared for the purpose of
providing a basis for an investment decision relating to the Company's or other
Debtors' stock or debt or for comparison with other financial information filed
with the Securities and Exchange Commission.
Most of
the Debtors' filings with the Bankruptcy Court are available to the public at
the offices of the Clerk of the Bankruptcy Court or the Bankruptcy Court's web
site (http://www.txwb.uscourts.gov) or may be obtained through private document
retrieval services. The Company undertakes no obligation to make any
further public announcement with respect to the documents filed with the
Bankruptcy Court or any matters referred to therein.
As
disclosed in our Form 8-K filed on April 22, 2009, we received Notice of
Acceleration documents from the lenders under the $50 million Senior Credit
Agreement and the $100 million Term Loan Agreement, which demands immediate
payment of the entire amounts due under these facilities and terminates the
lenders' commitments to make additional revolving credit loans. Any
efforts to enforce such payment obligations against the Company under the above
referenced credit facilities are stayed as a result of the commencement of the
chapter 11 cases in the Bankruptcy Court.
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory
Arrangements of Certain Officers
On
May 15, 2008, the Company amended its Bylaws to provide that the
Company's Controller shall be the principal accounting officer of the
Company. By virtue of such amendment, the Company's current Controller,
Richard A. Sartor, became the Company's principal accounting
officer.
Mr. Sartor,
age 56, has served as the Company's Controller since April 1997. He
has nearly 30 years of accounting and energy industry experience. A Certified
Public Accountant since 1980, Mr. Sartor operated a private accounting practice
from 1989 to 1997 and has been with such companies as Tesoro Petroleum, Gulf
Energy & Development and Hondo Oil & Gas. Mr. Sartor received a Bachelor
of Business Administration degree from the University of Texas at Austin and an
MBA from the University of Texas at San Antonio.
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
On May
15, 2009, the Board of Directors of the Company approved an amendment (the
"Amendment") to the Company's Bylaws to provide that the Company's
Controller shall be the principal accounting officer of the
Company.
The
foregoing description of the Amendment is not complete and is qualified in its
entirety by reference to the text of the Amendment attached as Exhibit 3.1 to
this Current Report on Form 8-K and incorporated herein by
reference.
Item
9.01 Financial
Statements and Exhibits.
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Exhibit No.
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Description
|
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Amendment
to Amended and Restated By-Laws of TXCO Resources Inc. adopted May 15,
2009
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Press
release dated May 18, 2009, entitled "TXCO Resources Files Voluntary
Bankruptcy Petition Under Chapter
11"
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