ERG Intermediate Holdings Cancels 363 Sale Process

20:00 EDT 11 Aug 2015 | Globe Newswire

HOUSTON, Aug. 12, 2015 (GLOBE NEWSWIRE) -- ERG Intermediate Holdings LLC and its affiliates ERG Resources Inc. LLC, ERG Operating Company, LLC, ERG Interests, LLC, and West Cat Canyon, LLC., all of which filed for Chapter 11 protection in the Northern District of Texas on April 30, 2015 (the "Companies"), announced today that the Companies have cancelled the 363 Sale Process previously underway and instead will shortly file a Plan of Reorganization.

The Companies did not receive an acceptable bid as required under the Bidding and Sale Procedures previously approved by the Bankruptcy Court. Instead, the Companies' prepetition Lender and Debtor-in-Possession Financing Lender (together, "Lenders") provided a proposal whereby the Lenders will support a Plan of Reorganization and provide significant exit financing to maintain and potentially expand the Companies' California operations and assets.

Kelly Plato, the Sole Manager of the Companies, said "We believe that a Plan of Reorganization which provides for significant new capital in the form of exit financing and which is supported by our current Lenders provides the best opportunity to maximize the value of the Companies. We also appreciate the continuing support of our vendors and employees as we work to put our plan in place."

Also, on August 7, 2015, the Companies' Unsecured Creditors' Committee ("Committee") filed a Motion seeking approval for the compromise of controversies in accordance with a Settlement and Transaction Support Agreement executed between the Lenders and the Committee. Among other terms, the settlement provides for the waiver of certain liens by the Lenders and the establishment of a Liquidation Trust, which will be initially funded by the Lenders and which will receive a transfer of the Companies' assets excluding those related to the Companies' California operations. The Bankruptcy Court in the Northern District of Dallas will consider the Committee's request at a hearing currently scheduled for August 25, 2015.

         Becky Roof
         Chief Restructuring Officer

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