On May 19, 2017 the United State Bankruptcy Court for the Southern District of Texas, Houston Division approved Azure Midstream Partners LP's Fifth Amended and Restated Plan of Liquidation filed with the court on May 18, 2017, Case No. 17-30461. The Plan is expected to become effective on June 2, 2017.
As previously disclosed, on January 30, 2017 Azure Midstream Partners LP, together with its general partner and its direct and indirect subsidiaries, filed voluntary petitions with the Court under Chapter 11 of title 11 of the US Bankruptcy Code.
As previously disclosed, on March 15, 2017 Azure entered into a purchase and sale agreement with BTA Gathering LLC (BTA) pursuant to which Azure sold substantially all of it business and assets to BTA. The purchase and sale agreement was approved by the Court by sale order dated March 15, 2017. The sale closed on April 28, 2017.
The plan provides that, upon the effective date of the plan, all common units shall be deemed cancelled and an entity formed pursuant to the Plan (the Azure Custodian) shall thereafter hold a single new unit of Azure common units as custodian for the benefit of the former unitholders, consistent with such unitholders' former relative priority and economic entitlements.
Under the terms of the Plan, a portion of the allowed, secured claims arising under the Debtors' prepetition credit agreement (the Secured Claims) shall be paid following confirmation of the Debtors' plan of reorganization. Thereafter, the Debtors shall pay all allowed tax claims, administrative expense claims, professional fees and expenses, general unsecured claims, and any costs associated with winding down the Debtors' estates. After such claims have been paid in full, any remaining cash will be used to first satisfy the remainder of allowed Secured Claims. If any cash remains in the Debtors' estates after satisfying the prepetition Secured Claims and all other allowed claims, and after liquidating the all remaining assets of the Debtors' estates, the Plan provides that Azure Custodian shall receive all such remaining cash, which will be distributed on a pro rata share to the common unitholders. As previously disclosed, it is unlikely that any common unitholders will receive any distributions.