SandRidge Energy Inc. announced Friday that its Chapter 11 reorganization plan was confirmed, allowing the company to exit bankruptcy proceedings within 30 days.
The Oklahoma City-based company had nearly $7 billion in assets when it filed a pre-packaged bankruptcy plan in south Texas on May 16 to restructure $3.7 billion of the company’s $4.4 billion in debt.
The plan cancels all of SandRidge’s common stock as well as 7 percent and 8.5 percent convertible perpetual preferred stock.
SandRidge faced opposition by shareholders including some who lost their entire savings.
U.S. Bankruptcy Judge David R. Jones approved the reorganization plan after it received overwhelming support from SandRidge’s lenders.
Under the company’s new capital structure, SandRidge will have access to more than $400 million of liquidity including cash on hand and funds available under its first lien credit facility.
Along with detailing the reorganized company’s finances, the court order also prevents SandRidge from pursuing certain litigation and releases the company and its directors and officers from certain lawsuits, according to a report in The Oklahoman.
“Litigation by the debtors against the debtors’ directors and officers would be a distraction to the debtors’ business and restructuring and would decrease rather than increase the value of the estates,” the order stated. “The release of the debtors’ directors and offices contained in the plan have the consent of the debtors, and the releasing parties and are in the best interest of the estates.”
The order specifically addresses all lawsuits between SandRidge and Tom Ward, the company’s founder and former CEO.
“All claims and causes of action held by Ward against the debtors and held by the debtors against Ward … are hereby discharged, released and expunged,” the order stated.