Lilis Settlement Approved, Clearing Path to Sale, Reorganization

Bankrupt oil and gas producer Lilis Energy Inc. won court approval of a settlement with a creditor, paving the way for a company sale and reorganization plan.

The creditor, Värde Investment Partners L.P., had opposed terms of Lilis’ proposed sale, arguing that a deal shouldn’t clear liens and claims.

But Värde agreed to sign off on the sale in return for liability releases and $3.75 million in cash. Värde would also receive additional compensation if the sale exceeds $45 million.

Lilis needed the Värde deal—approved Thusday by Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of ...