Fracking Supplier Says Loan-to-Own Scheme Forced Bankruptcy Case

A Texas company that supplies sand to fracking-style oil drillers was forced to file bankruptcy in order to thwart an alleged loan-to-own scheme by lenders, lawyers told a judge during a court hearing Friday.

FCI Sand Operations is being taken advantage of by a group of lenders, including a former company director, who are trying to takeover the company by blocking it from raising enough money to keep operating, bankruptcy attorney Davor Rukavina said in federal court in Dallas.

“We have friendly lenders in the debt stack and unfriendly lenders in the stack,” Rukavina said.

Just before filing a Chapter ...