Southland Bankruptcy Plan Approved, Allowing $252 Million Sale

Natural gas driller Southland Royalty Co. LLC received court approval of its bankruptcy wind-down plan, largely overcoming a challenge from royalty owners who sought a $3 million set-aside to satisfy their claims.

The plan, approved Thursday, centers around a sale of the business to Williams Companies Inc. affiliate Wamsutter E&P LLC for $148 million in cash and assumption of more than $100 million in liabilities. Proceeds will partially repay pre-bankruptcy lenders and general unsecured creditors.

Lenders, led by Citibank NA, are projected to recover between 7.6% and 10.6% on about $485 million in claims. General unsecured creditors, with $77 ...