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Legacy Reserves Inc. Files For Chapter 11 Protection To Facilitate Negotiated Financial Restructuring


MIDLAND, TexasJune 18, 2019 /PRNewswire/ — Legacy Reserves Inc. (NASDAQ: LGCY) (“Legacy”) announced today that it has, together with its subsidiaries (collectively, the “Company”), commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), pursuant to the terms of the previously announced global restructuring support agreement (the “Global RSA”) between the Company, its lenders under its revolving credit facility (the “RBL Lenders”), its lenders under its second lien term loan (“Second Lien Lenders), and an ad hoc group of senior noteholders (the “Ad Hoc Group of Senior Noteholders”, which, together with the other creditors party to the Global RSA, hold most of the Company’s outstanding unsecured notes).

The Company intends to operate in the ordinary course of business during the chapter 11 cases, and has filed a number of customary “first day” motions to enable the Company’s operations to continue as usual.  Specifically, the Company requested authority, among other things, to pay in full on a normal-course basis employee wages and honor existing employee benefit programs, vendors and other operating expenses, joint interest billings for non-operated properties, and royalties to mineral interest owners under terms of applicable agreements. As previously announced, the Company has received a commitment for $350 million in debtor-in-possession (“DIP”) financing that, subject to court approval, will refinance portions of the Company’s existing reserve-based credit facility and, when combined with cash from operations, will provide ample liquidity to support the Company’s continuing business operations during the chapter 11 cases.

As previously announced, under the Global RSA, creditors constituencies across all classes of the Company’s capital structure have reached an agreement on the terms of a plan of reorganization (“Plan”). Under the terms of the Global RSA, the Company’s unsecured notes will be extinguished with substantially impaired class treatment, and all common stock of Legacy will be extinguished with no associated recovery. The Company expects to file the Plan within 45 days.

Legacy’s stockholders are cautioned that trading in shares of Legacy’s common stock during the pendency of the chapter 11 cases will be highly speculative and will pose substantial risks. Legacy expects that its common stock will be delisted from The Nasdaq Stock Market LLC for non-compliance with marketplace rules as result of the chapter 11 cases.  Additionally, Legacy expects there will be no recovery for any equity holder in the chapter 11 cases. Accordingly, Legacy urges extreme caution with respect to existing and future investments in its common stock.

Court filings and information about the chapter 11 cases can be found at a website maintained by the Company’s claim agent, Kurtzman Carson Consultants LLC, at www.kccllc.net/legacyreserves, or by calling (866) 967-0495 (toll-free domestic) or (310) 751-2695 (international).

Perella Weinberg Partners and its affiliate, Tudor Pickering Holt & Co., is acting as financial advisor for the Company, Sidley Austin LLP is acting as legal advisor, and Alvarez & Marsal is acting as restructuring advisor.  PJT Partners LP is acting as financial advisor for the Second Lien Lenders, and Latham & Watkins LLP is acting as legal advisor.  Houlihan Lokey is acting as financial advisor for the Ad Hoc Group of Senior Noteholders, and Davis Polk & Wardwell LLP is acting as legal advisor.  RPA Advisors, LLC is acting as financial advisor to Wells Fargo Bank, as administrative agent for the RBL Lenders, and Orrick Herrington & Sutcliffe LLP is acting as legal advisor.

About Legacy Reserves Inc.

Legacy Reserves Inc. is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States.  Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions.  Additional information regarding the Company is available at www.legacyreserves.com.

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