CorEnergy Infrastructure Trust’s Chapter 11 plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Western District of Missouri on May 24, 2024.
Creditors and existing preferred equity holders entitled to vote overwhelmingly supported the plan. Upon emergence from bankruptcy, which is expected to occur on June 12, 2024, the common stock of the reorganized company will be owned by the holders of its 5.875% unsecured convertible senior notes due 2025 and existing preferred equity. The company expects to continue to qualify as a real estate investment trust.
CorEnergy plans to pursue an over-the-counter listing for the shares of common stock, providing liquidity for its equity owners while reducing overhead expenses to a level commensurate with its smaller size. The company expects to post an investor presentation giving effect to the plan prior to, or shortly after, the effective date.
“We are pleased that our financial stakeholders voted in favor of the recapitalization of our balance sheet, following the successful sale of the MoGas and Omega Pipelines and the full repayment of our secured debt,” Dave Schulte, chairman and CEO of CorEnergy, said. “These transactions were the result of a comprehensive strategic review process in which our board and advisors analyzed all reasonably available alternatives given the challenging market conditions we have faced since 2020.”
“Crimson Pipeline has operated as usual throughout the company’s restructuring process and is expected to continue doing so,” Robert Waldron, president of CorEnergy, said. “We await a decision on our requested San Pablo Bay rate relief before the California Public Utilities Commission to ensure the viability of the Crimson Pipeline assets, which we anticipate in late 2024. We also continue to evaluate potential opportunities to redeploy our assets into energy transition.”
By number of creditors voting, the plan received unanimous support from holders of the Grier Member Claims, greater than 99% support from holders of the senior notes and 78% support from the holders of the preferred equity.
Upon emergence from bankruptcy, which is expected to occur on June 12, 2024, the following will occur:
- Existing common stock will be cancelled.
- 375% Series A Cumulative Redeemable Preferred Stock will be cancelled, and the holders will receive shares of new common stock. No action is required on the part of the holders and the new common stock will be deposited into their existing accounts.
- 875% convertible senior notes due 2025 will be cancelled and the holders will receive a combination of cash, new common stock and a pro rata participation interest in a new $45 million loan due 2029 bearing 12% interest. No action is required on the part of the holders to receive the cash and new common stock. Each holder will receive instructions to complete a signature page and provide the term loan administrative agent other required information to join the term loan. Senior note holders that do not comply within one year of the effective date will forfeit their interest in the term loan.
- The company expects the new common stock will be traded in the OTC market.
- CorEnergy will no longer file reports with the Securities and Exchange Commission.
- The company’s corporate headquarters will be relocated to Denver, Colorado.
- Robert Waldron, currently president and chief financial officer of CorEnergy, will be the new CEO.
- A new board of directors will be seated.
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Husch Blackwell served as legal counsel to the company, Teneo Capital as its financial advisor and Miller Buckfire as its investment banker. Faegre Drinker Biddle & Reath served as legal counsel to the ad hoc group of Noteholders and Perella Weinberg Partners and TPH&Co., the energy business of Perella Weinberg Partners, as its investment bankers.
