General News

GMX Resources Confirms Reorganization Amidst Bankruptcy Case

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GMX Resources Inc. has updated its restructuring process.

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 in the Bankruptcy Court for the Western District of Oklahoma. Two of the Company's subsidiaries, Diamond Blue Drilling Co. and Endeavor Pipeline Inc., 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 that its confirmed Plan of Reorganization 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. and/or Thunderbird Resources LP. 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.