GMX RESOURCES INC. Announces Effective Date of Plan of Reorganization
February 03 2014 - 9:53PM
GMX RESOURCES INC., (OTC Markets:GMXRQ)
("GMXR" or the "Company") is an oil and gas
exploration and production Company with assets in the Williston
Basin, Denver Julesburg ("DJ") Basin and East Texas Basin.
As previously reported, on April 1, 2013, the Company filed a
voluntary petition (In re: GMX Resources Inc., Debtor, Case No.
13-11456) for reorganization under chapter 11 of title 11 of the
U.S. Code (the "Bankruptcy Code") in the Bankruptcy Court for the
Western District of Oklahoma (the "Bankruptcy Court"). Two of the
Company's subsidiaries, Diamond Blue Drilling Co. and Endeavor
Pipeline Inc. (collectively with the Company, the "Debtors"), also
filed related petitions with the Bankruptcy Court (Case Nos.
13-11457 and 13-11458, respectively). The Company's petition and
its subsidiaries' petitions are referred to herein collectively as
the "Bankruptcy Case."
Chapter 11 Plan of Reorganization Effective
Date
The Company announces today (the "Effective Date") that its
confirmed Plan of Reorganization (the "Plan") has become effective.
The Plan, which was confirmed by a Bankruptcy Court order dated
January 22, 2014, reorganizes the Debtors into privately held
entities that will not be listed on any national securities
exchange. The Company expects to formally terminate the
registration of its securities with the Securities and Exchange
Commission early this week.
The reorganization of the Debtors' capital structure under the
Plan reduces the total amount of outstanding indebtedness by
approximately $505,000,000 under four separate indentures. Secured
claims under the senior-most indenture, allowed by the Bankruptcy
Court in the amount of $338,000,000 have been exchanged for equity
interests in Thunderbird Resources Equity Inc. ("Reorganized GMXR")
and/or Thunderbird Resources LP ("New GMXR"). All priority non-tax
claims have been paid off today or will be paid as soon as
reasonably practical. General unsecured creditors received a pro
rata share of (1) interests in a creditor trust created as of the
Effective Date; and (2) $1.5 million in cash. At the option of the
Debtors (with certain required consents), intercompany claims were
either reinstated or eliminated, in full or in part. As of the
Effective Date, all rights and interests of holders of the
Company's common and preferred stock have been terminated. Finally,
equity interests in the debtor subsidiaries are now held directly
by Reorganized GMXR for the benefit of the holders of Reorganized
GMXR common stock.
The formation of New GMXR and Reorganized GMXR are both
effective as of today. In connection with the Plan, the Company has
contributed all of its assets to New GMXR free and clear of all
liens and encumbrances. Additional restructuring transactions set
forth in the Plan and any additional transactions determined to be
necessary to an effective reorganization have been completed as of
the Effective Date. Equity interests in Reorganized GMXR and New
GMXR are subject to certain transfer and other restrictions
pursuant to a Shareholders' Agreement and Agreement of Limited
Partnership that became effective today, as well as the
organizational documents of the reorganized entities.
As of the Effective Date, the Company's debtor-in-possession
credit facility has been converted into a new exit credit facility.
All cash consideration necessary for the Debtors to make payments
on today's Effective Date transactions have been obtained from cash
on hand under the new exit credit facility. Pursuant to the terms
of the credit agreement governing the exit facility, the
reorganized entities may borrow from the new exit credit facility
to support their post-bankruptcy financing needs.
GMXR is an exploration and production company. The
company is currently developing its Bakken and Three Forks oil
shale resources located in the Williston Basin, North Dakota.
GMXR's large natural gas resources are located in the East Texas
Basin, primarily in the Haynesville/Bossier gas shale and the
Cotton Valley Sand Formation; where the majority of GMXR's acreage
is contiguous, with infrastructure in place and substantially all
held by production.
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included in this press release
that address activities, events or developments that GMXR expects,
believes or anticipates will or may occur in the future are
forward-looking statements. These statements include management's
expectations and desire to address GMXR's financial challenges,
preserve the value of assets and address important issues in an
orderly way. These statements are based on certain assumptions and
analysis made by GMXR in light of its experience and perception of
historical trends, current conditions, expected future
developments, and other factors it believes appropriate in the
circumstances, including the assumption that there will be no
material change in the operating environment for GMXR's properties.
In the event that the risks discussed above and disclosed in GMXR's
public filings cause results to differ materially from those
expressed in GMXR's forward-looking statements, GMXR's business,
financial condition, results of operations or liquidity, and the
interests of creditors, equity holders and other constituents,
could be materially adversely affected. GMXR undertakes no
obligation (and expressly disclaims any such obligation) to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise. For
additional information concerning factors that could cause actual
results to materially differ from those projected herein, please
refer to GMXR's reports filed with the Securities and Exchange
Commission on Form 10-K and 10-Q.
CONTACT: Michael Rohleder, President
405.254.5838