Quicksilver Resources Inc. Files For Bankruptcy In Delaware

On March 17, 2015, Quicksilver Resources Inc. and certain affiliates (collectively, the “Debtors” and when combined with certain non-debtor affiliates, the “Company”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware.   According to the first day declaration of Vanessa Gomez LaGatta, the Company’s Senior Vice President, Chief Financial Officer and Treasurer (such declaration being the “LaGatta Declaration”), the Company is an independent producer of oil and gas with interests in (i) the Barnett Shale in the Forth Worth Basin in north-central Texas; (ii) the Delaware Basin in western Texas; (iii) the Horn River Basin in British Columbia, Canada (the “Horn River Basin Assets”); and (iv) the coalbeds of the Horseshoe Canyon in Alberta, Canada (together with the Horn River Basin Assets, the “Canadian Assets”).  See LaGatta Declaration at 8-10.The Company’s non-debtor affiliates are composed on Canadian entities holding interests in the Canadian Assets.  The Company has not commenced an insolvency case in Canada and the lenders to the Canadian affiliates have entered into a forbearance agreement that expires on June 16, 2015. See LaGatta Declaration at 9-10 and 20-21.The Company’s capital structure includes approximately $1.098 in secured debt obligations, composed of (A) first lien revolving credit facilities in the United States and in Canada with combined indebtedness of approximately $273 million and (B) approximately $825 million in second lien debt attributable to a second lien term facility and second lien notes.  In addition, the Company has issued approximately $975 million worth of unsecured notes. See LaGatta Declaration at 10-17.According to the LaGatta Declaration, the Company—facing liquidity issues—began to market its assets in the second-half of 2014.  This effort, however, failed on account of the precipitous fall in commodity prices.  The Debtors elected not to make a $13.6 million interest payment on certain of its notes that was due on February 17, 2015.  Facing likely defaults under the Company’s credit agreements and an unfavorable opinion from the Company’s auditor, the Debtors sought bankruptcy protection.  See LaGatta Declaration at 17-20.A copy of the LaGatta Declaration is accessible here:  Download LaGatta DeclarationFor further information, please contact a Thompson & Knight Bankruptcy and Restructuring Attorney. For more information on the Thompson & Knight’s Bankruptcy and Restructuring Practice, please visit www.tklaw.com/bankruptcy-and-restructuring/.