End to Alta Mesa Bankruptcy Begins as Liquidation Plan Approved

Alta Mesa Resources Inc. got court confirmation of its Chapter 11 plan of liquidation, marking the beginning of an end to a tumultuous bankruptcy.

The approval will let the company wind down its affairs after it was forced to sell most of its assets at a steep discount due to Covid-19 and a collapse in oil prices.

Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas confirmed the plan for Alta Mesa and its affiliates after a hearing Wednesday.

The plan “was overwhelmingly accepted” by every class of creditors and the company resolved a dozen objections, Caroline A. Reckler of Latham & Watkins LLP, an attorney for Alta Mesa, told the court.

The plan appoints a plan administrator and a litigation trustee to efficiently wind down the estates, Robert Albergotti, the company’s chief restructuring officer, said in a declaration filed with the court. The wind-down budget provides sufficient funds to pay all administrative claims, Albergotti said.

Isgur on Wednesday also confirmed the plan and company disclosures of Alta Mesa subsidiary Kingfisher Midstream, LLC, which followed Alta Mesa into bankruptcy in January.

Houston-based Alta Mesa filed for bankruptcy in September 2019 with nearly $1.1 billion in outstanding debt.

It received court approval in January for a $320 million asset sale to BCE-Mach III, a joint venture of Mach Resources and Bayou City Energy. The deal included Alta Mesa’s energy exploration business and Kingfisher’s processing and transportation business.

The buyer backed out of the deal in March, saying the sudden drop in oil prices had threatened its financing. Alta Mesa renegotiated the deal, and Isgur April 9 approved a revised sale for $220 million. The sale closed the next day.

There were many disputes over the sale and the distribution of proceeds, but eventually mediation led to a global settlement with stakeholders that formed a basis for the plan, Reckler said Wednesday.

The case is Alta Mesa Resources, Inc., Bankr. S.D. Tex., No. 19-35133, Order 5/27/20.