Item 1.03. Bankruptcy or Receivership.
On
The Prepackaged Plan implements the merger and restructuring transactions
contemplated under the Merger Agreement and
• Cancellation of Notes Claims in Exchange for Bonanza Creek Common Stock andNew Bonanza Creek Senior Notes. Holders of Allowed Notes Claims will receive their pro rata share of (i) 9,314,214 shares of Bonanza Creek common stock, which will constitute approximately 30.4% of the fully diluted aggregate outstanding shares of Bonanza Creek common stock (subject to dilution as contemplated by the terms set forth in the Merger Agreement and the Prepackaged Plan), and (ii)$100 million in principal of newly issued 7.5% senior notes due 2026 of Bonanza Creek. • Cancellation of Existing HPR Interests in Exchange for Bonanza Creek Common Stock. Holders of Existing HPR Interests will receive their pro rata share of 490,221 shares of Bonanza Creek common stock, which will constitute approximately 1.6% of the fully diluted aggregate outstanding shares of Bonanza Creek common stock (subject to dilution as contemplated by the terms set forth in the Merger Agreement and the Prepackaged Plan). • Exit RBL Facility. The capital structure of Bonanza Creek following the consummation of the transactions contemplated by the Prepackaged Plan will include a senior secured credit facility with aggregate available commitments (drawn and undrawn, collectively) of not less than$250 million in principal amount. Allowed RBL Claims are unimpaired under the Prepackaged Plan. • Operational Claims Unimpaired. Holders of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Other Secured Claims, Allowed Other Priority Claims, and Allowed General Unsecured Claims are unimpaired under the Prepackaged Plan.
HighPoint has filed customary motions with the Court seeking a variety of "first-day" relief, including authority to pay owner royalties, employee wages and benefits, and certain vendors and suppliers in the ordinary course for goods and services provided.
The consummation of the Prepackaged Plan will be subject to confirmation by the
Court in addition to other conditions set forth in the Prepackaged Plan, the
Merger Agreement, the Transaction Support Agreement (the "TSA"), dated as of
The foregoing description of the Prepackaged Plan does not purport to be
complete and is qualified in its entirety by reference to the complete
Prepackaged Plan, which is filed as Annex I to Bonanza Creek's Prospectus, dated
as of
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Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The filing of the Chapter 11 Cases described above in Item 1.03 constitutes an event of default that accelerated the Company's obligations under the documents governing the following debt instruments (the "Debt Documents"):
•$140 million of outstanding borrowings under the Fourth Amended and Restated Credit Agreement, dated as ofSeptember 14, 2018 , among the Company, as guarantor,HighPoint Operating Corporation , as borrower ("HighPoint OpCo"),Fifth Pocket Production, LLC and the banks named therein, as amended by the First Amendment, dated as ofMay 21, 2020 , and Second Amendment, dated as ofNovember 2, 2020 ; •$350 million in aggregate principal amount of HighPoint OpCo's 7.0% Senior Notes dueOctober 15, 2022 (the "2022 Notes"), issued pursuant to that certain Indenture (the "Base Indenture"), datedJuly 8, 2009 , by and among HighPoint OpCo, the subsidiary guarantors party thereto andDeutsche Bank Trust Company Americas , as trustee (the "Trustee"), as supplemented by the Fourth Supplemental Indenture, datedMarch 12, 2012 , by and among HighPoint OpCo, the Trustee, and the subsidiary guarantors party thereto, as amended and supplemented to the date hereof; and •$275 million in aggregate principal amount of 8.75% Senior Notes dueJune 15, 2025 (the "2025 Notes"), issued pursuant to that certain Indenture, datedApril 28, 2017 , by and among HighPoint OpCo, the Trustee, and the subsidiary guarantors party thereto, as amended and supplemented to the date hereof.
The Debt Documents provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Documents are automatically stayed as a result of the Chapter 11 Cases and the creditors' rights of enforcement in respect of the Debt Documents are subject to the applicable provisions of the Bankruptcy Code.
Item 7.01. Regulation FD Disclosure
Press Release
In connection with the filing of the Chapter 11 Cases, the Company issued a
press release on
Additional Information on the Chapter 11 Cases
Court filings and information about the Chapter 11 Cases can be found at a
website maintained by the Company's claims and noticing agent,
The information in this Item 7.01 and Exhibit 99.1 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
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Item 8.01. Other Events.
Cautionary Note Regarding the Company's Securities
The Company cautions that trading in the Company's securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company's securities may bear little or no relationship to the actual recovery, if any, by holders of the Company's securities in the Chapter 11 Cases.
Forward-Looking Statements and Cautionary Statements
Certain statements in this Current Report on Form 8-K concerning the Chapter 11 Cases, including any statements regarding the expected timetable for completion of the Chapter 11 Cases, the results, effects, benefits and synergies of the transactions contemplated by the Merger Agreement, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding HighPoint's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
Whether actual results and developments will conform with HighPoint's expectations and predictions is subject to a number of risks and uncertainties, including, but not limited to, risks attendant to the bankruptcy process, including HighPoint's ability to obtain court approvals with respect to motions filed or other requests made to the Court throughout the course of the Chapter 11 Cases, the outcomes of court rulings and the Chapter 11 Cases in general and the length of time that the Company may be required to operate in bankruptcy; the effects of the Chapter 11 Cases, including increased legal and other professional costs necessary to effectuate the Prepackaged Plan, on the Company's liquidity (including the availability of operating capital during the pendency of the Chapter 11 Cases), results of operations or business prospects; the actions and decisions of creditors, regulators and other third parties that have an interest in the Chapter 11 Cases, which may interfere with the ability to confirm and consummate the Prepackaged Plan; and the effects of the Chapter 11 Cases on the interests of various constituents. Expectations regarding business outlook of the combined business, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. HighPoint does not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description of Exhibits 99.1 Press Release dated as ofMarch 14, 2021 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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