Yuma Energy has submitted for Chapter 11 personal bankruptcy protection in the U.S. Individual bankruptcy Court docket for the Northern District of Texas. The business stated its cash position deteriorated in the to start with quarter of 2020 and its cash movement from operations was no lengthier sufficient to go over its operating costs.
It was looking for courtroom approval to maintain an auction “for significantly all” of its assets, it stated. The auction is envisioned to happen in the to start with 90 days of the personal bankruptcy. The assets are mainly properties in Louisiana, Texas, Wyoming, and Oklahoma.
Yuma stated it might negotiate for new debtor-in-possession funding but was not particular individuals negotiations would be effective. The business designs to continue to run its organization in the regular study course during the personal bankruptcy procedure.
“Our revenues and cash position have eroded to the point of unsustainability mainly pushed by the serious downturn in oil charges,” the company’s previous CEO and CFO, Anthony Schnur, stated in a assertion. “After significantly consideration, the company’s Board of Administrators came to the selection that the use of the Chapter 11 liquidation procedure was the greatest route forward to optimize values and recoveries.”
Schnur resigned as interim CEO and CFO on April 10. He will continue to oversee the debtors via Ankura Consulting Group, which was retained by Yuma as its economic adviser.
Schnur stated Yuma had recapitalized its economic composition via credit score and restructuring agreements with its lender, YE Investment, and with Pink Mountain Funds Companions, but YE not long ago notified Yuma it was terminating the credit score agreement and accelerating all payments thanks to Yuma’s failure to make timely desire payments and comply with covenants. Pink Mountain also terminated its restructuring agreement.
YE Investment, an affiliate of Pink Mountain, introduced it had bought all of Yuma’s senior secured financial institution financial debt in September 2019.