Erin energy has filed for Ch11 Bakruptcy. According to Gambian...

Erin energy has filed for Ch11 Bakruptcy.  According to Gambian news reports Erin are seeking US bankruptcy court permission to obtain Debtor in posession (DIP) financing to continue operations.

Good news is that if approved Erin must pay all obligations when due and have strict reporting requirements.
They would require US bankruptcy court approval to sell the asset to FAR though.

I wonder if YF Finance might lend Erin the money with the asset as security?

Debtor in Possession Guidelines

Below is a list containing general guidance and Chapter 11 debtor obligations provided by the U.S. Department of Justice:

• The debtor is required to comply in all respects with Title 11 of the United States Code (the “Bankruptcy Code”), the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and the Local Rules of Practice for the United States Bankruptcy Court.
• The debtor shall appear at or participate in the initial debtor interview prior to the Section 341(a) initial meeting of creditors and shall also appear at the Section 341(a) initial meeting of creditors.
• The debtor must pay all obligations arising after the filing of the petition (“post petition”) in full when due.  This includes not only general business expenses, but all post-petition obligations in the ordinary course of business including but not limited to:
  -Wages
  -U.S. Trustee Quarterly Fees and Court Costs
  -FICA, both employee and employer share
  -Tax deposits withheld from wages
  -Any other taxes
• The debtor may not pay pre-petition obligations except as allowed by the Bankruptcy Code or by order of the court.
• The debtor shall obtain court approval to obtain secured credit and unsecured credit outside the ordinary course of business.
• The debtor shall obtain court approval to use cash collateral.
• The debtor shall obtain court approval to sell, use or lease property outside of the ordinary course of business.
• The debtor shall obtain court approval to employ and pay professionals.
• The debtor shall maintain adequate insurance on estate assets.
• The debtor shall expeditiously close pre-petition banking/depository accounts and open banking/depository debtor-in-possession accounts.
• The debtor shall timely file all federal, state and local tax returns when due, or shall procure an extension from the appropriate taxing authority, unless otherwise provided by applicable law or by order of the court.
• Individual Chapter 11 debtors shall provide appropriate notices in connection with domestic support obligations to such claim holders and appropriate state agencies.

Debtors in possession have additional requirements related to insurance (and timely proof of insurance), and must provide periodic reporting.


Read more: Debtor In Possession (DIP) https://www.investopedia.com/terms/d/debtorinpossession.asp#ixzz5EwzoZfAH
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