Case 17-10064-KG
Doc 13
Filed 01/09/17
Page 13 of 23
inaction, or acquiescence of any or all of the Prepetition Secured Parties and the DIP Secured Parties. See Interim Order ¶ 8. d.
Local Rule 4001-2(a)(i)(D) – Liens on Avoidance Actions. Subject to entry of a Final Order, the Adequate Protection Liens shall attach to Avoidance Actions and any proceeds relating thereto. See Interim Order ¶ 2(i).
e.
Local Rule 4001-2(a)(i)(E) – Provisions Deeming Prepetition Debt to be Post Petition Debt. The Orders do not deem prepetition secured debt to be postpetition debt.
f.
Local Rule 4001-2(a)(i)(F) – Disparate Treatment of Professionals Retained by the Committee. In compliance with Local Rule 40012(a)(i)(F), the Interim Order contains a Debtors’ Professionals PostDefault Carve-Out Cap of $250,000.00 and a Committee Post-Default Carve-Out Cap of $50,000.00. See Interim Order, ¶ 7.
g.
Local Rule 4001-2(a)(i)(G) – Non-Consensual Priming. The Order provides for the priming of the Prepetition Liens, which the Prepetition Secured Parties have consented to. See Interim Order ¶ 4(iii).
h.
Local Rule 4001-2(a)(i)(H) – Provisions Affecting the Court’s Power to Consider the Equities of the Case. The proposed waiver of “equities of the case” claims under section 552(b) of the Bankruptcy Code will be effective after entry of the Final DIP Order. BACKGROUND
10.
Chieftain is a privately owned producer of hydraulic fracturing sand (“Frac
Sand”), a monocrystalline sand used as a proppant (a solid material, typically sand, designed to keep an induced hydraulic fracture open) to enhance oil and gas product recovery in petroleumrich unconventional shale deposits. 11.
With the current petroleum recession having caused demand for Frac Sand to
diminish to historic lows, the Debtors are unable to generate sufficient revenue and liquidity to continue to maintain their capital structure on a long term basis. To maximize value, the Debtors have entered into a stalking horse asset purchase agreement with Energy Capital Partners Mezzanine Opportunities Fund A, LP. The Debtors filed these chapter 11 cases with the goal of
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