Ultra Petroleum has agreed “under protest” to pay its Opco noteholders USD 66.8m on account of makewhole claims. Meanwhile, Ultra still plans to file an appeal of a court ruling that the company must pay noteholders a USD 201m makewhole payment and USD 186m in post-petition interest.
The acquiescence to pay part of the claims came in an amended filing of a motion to stay the makewhole judgment on 29 September. Ultra said it would only make the payment assuming the company could get the funds back if it succeeds in appealing the makewhole ruling that Judge Marvin Isgur entered on 21 September.
A hearing on the matter is scheduled for Wednesday (4 October) at 4pm CT in the US Bankruptcy Court for the Southern District of Texas.
Ultra said in its request to stay the makewhole payment pending an appeal that it already has a reserve of USD 400m to satisfy the judgment.
Based on the average time of 19 months for two potential appeals – if the dispute goes to District Court and the Fifth Circuit – Ultra said it calculated that USD 8m in post-judgment interest would be due, in addition to the total current USD 397m payment. By then, the reserve fund will have accrued interest and be up to USD 401m, it said.
Ultra’s motion is asking the court to issue an order determining that, if it posts an additional USD 4m, it will have enough security to ensure it will be able to make the whole payment if it has to once appeals are over. The company wants Judge Isgur to issue an order staying the majority of the payment during the appeal process, except for the USD 66.8m Ultra consented to pay.
Judge Isgur confirmed Ultra’s reorganization plan in March and the company emerged from bankruptcy in April, with the makewhole dispute still pending. Post-bankruptcy, the company has run into hurdles unlocking shareholder value.