Each one in plain English, with the numbers worked through for a shareholder.
31 Jan 2017bankruptcy or receivership▼ BadMajor
On January 27, 2017 the bankruptcy court confirmed the Chapter 11 plan covering Berry and Linn Acquisition Company, resolving the plan question left open since the May 2016 filing. Berry lenders get a full recovery (a share of an exit facility of up to $550 million plus a paydown, or non-conforming term notes), Berry unsecured noteholders get 82.3% of the new equity (after reservations for an employee incentive plan) or a cash pool share, and general unsecured creditors get 17.7% of the equity or a share of a $35 million cash pool. All existing equity, which was 100% held by Linn Acquisition as of January 23, 2017, is cancelled when the plan takes effect. The company targets the effective date within 30 days but gives no assurance it will happen.
On October 14, 2016 the debtors and the administrative agents under the Linn and Berry credit agreements signed a fourth amendment to the restructuring support agreement, moving the plan filing deadline from 156 to 163 days after the May 11 petition date. This uses the 163-day extension allowed under the third amendment; the filing states no change to plan terms.
On October 7, 2016 the debtors and some consenting creditors signed a third amendment to the restructuring support agreement, moving the deadline for filing the plan, solicitation materials and disclosure statement motion from 149 to 156 days after the May 11 petition date. The administrative agent and the debtors may agree to push it to 163 days without the consent of the required consenting creditors. It continues the string of schedule extensions; the filing states no change to plan terms.
On September 23, 2016 the debtors and some consenting creditors signed a second amendment to the restructuring support agreement, pushing the deadline for filing the plan, solicitation materials and disclosure statement motion from 135 to 149 days after the May 11 petition date. It is a further delay to the schedule; the filing states no change to plan terms.
On September 8, 2016 the debtors and some consenting creditors amended the restructuring support agreement to move the deadline for filing the plan, solicitation materials and disclosure statement motion from 120 to 135 days after the May 11 petition date. This is a schedule extension; the plan terms are unchanged in this filing.
On May 11, 2016 Berry filed for Chapter 11 in Texas together with Linn Energy, LinnCo and Linn subsidiaries, after signing a restructuring support agreement on May 10 with lenders holding at least 66.67% of the Berry and Linn credit facilities. The filing accelerated Berry's credit agreement and its 6.75% notes due 2020 and 6.375% notes due 2022, and enforcement is stayed. Under the plan Berry would separate from Linn; its lenders and unsecured creditors would get new Berry equity in amounts still to be set, and all existing equity interests in Linn, LinnCo and Berry would be extinguished without recovery.
This amendment continues the auditor change: on March 25, 2014 Berry engaged KPMG LLP to audit its financial statements as of December 31, 2013 and for December 17 through December 31, 2013, with Linn's audit committee approving. It replaces PwC, which is to audit the periods before the acquisition.
On March 17, 2014 Berry (now a Linn subsidiary) dismissed PricewaterhouseCoopers as auditor, effective once PwC finishes the 2013 audit and the related 10-K is filed. Linn's audit committee approved it, and the filing reports no disagreements with PwC and no adverse opinions in 2011 and 2012. The company's address is now Houston, Texas.
The Linn merger closed on December 16, 2013 after Berry stockholders approved it (42,151,040 votes for, 3,670,065 against). Each Berry share was cancelled and converted into 1.68 LinnCo shares, and Berry converted into Berry Petroleum Company, LLC, now a wholly owned subsidiary of Linn. Its stock was to be delisted from the NYSE before trading on December 17, 2013, it intends to file Form 15 to deregister, and its directors and executive officers ceased serving. This resolves the pending merger thread.
On December 6, 2013 Berry agreed in principle to settle a Delaware stockholder class action (filed April 12, 2013) alleging the board ran an inadequate sale process and failed to disclose material information about the Linn/LinnCo merger. As part of the settlement Berry, Linn and LinnCo added disclosures to the merger proxy (including an updated table showing the deal worth about $52.35 per Berry share at December 6, versus $53.10 at November 12, and more detail on negotiation of the exchange ratio). The defendants deny wrongdoing, the settlement needs Delaware court approval, and it does not change the December 16 meeting dates or the consideration.
Berry filed its final proxy statement for the Linn merger, with a special stockholder vote set for December 16, 2013 (record date November 14). The deal was amended again on November 13, 2013, and gives 1.68 LinnCo shares per Berry share, a fixed ratio, about 93.6 million LinnCo shares in total. At LinnCo's $31.61 close on November 12, that was about $53.10 per Berry share, versus about $55.79 at the November 1 price. Berry's board recommends voting for the merger; the vote is not yet held, so the outcome is open.
On November 3, 2013 Berry amended the Linn merger agreement, raising the exchange ratio from 1.25 to 1.68 LinnCo shares per Berry share and extending the date either side may terminate from October 31, 2013 to January 31, 2014. Berry's board unanimously approved the amendment and still recommends the deal. This improves the terms offered to Berry shareholders in the pending merger.
