Apollo Wins Appeals Court Reversal in Oil Driller Bankruptcy (2)

Apollo Global Management and Fidelity Management & Research Co. won an appeals court battle to unwind a bankruptcy court ruling that awarded them and other lenders a 30% stake of oil driller Mesquite Energy Inc., while giving 70% to unsecured creditors.

The Houston bankruptcy court should have granted the lender group 100% of the equity in Mesquite because the value of their liens exceeded the stipulated enterprise value of the reorganized company, a three-judge panel of the US Court of Appeals for the Fifth Circuit said in a Friday opinion.

The lower court was wrong to award the unsecured ...