STONE ENERGY CORPORATION (NASDAQ:SGY) Files An 8-K Regulation FD Disclosure
Item7.01.
| Regulation FD Disclosure. |
On December16, 2016, an ad hoc group of certain of Stone Energy
Corporations (Stone or the
Company) stockholders (the
Stockholder Ad Hoc Group) filed a
motion (the Equity Committee Motion) to
appoint an official committee of equity security holders in
connection with the Companys previously announced Chapter 11
proceedings. On December20, 2016, the Company entered into new
confidentiality agreements (collectively, the
Confidentiality Agreements) with an ad
hoc group (the Noteholder Ad Hoc Group)
of certain holders of the Companys (i)13/% Senior Convertible Notes due 2017, and
(ii)71/% Senior Notes due 2022.The Company
engaged in discussions with, among others, the Stockholder Ad Hoc
Group to reach a resolution of the Equity Committee Motion. On
December21, 2016, the Company reached a settlement agreement with
the Stockholder Ad Hoc Group (the
Settlement), which is also supported by
the Noteholder Ad Hoc Group. to the terms of the Confidentiality
Agreements, Stone has agreed to publicly disclose all material
non-public information regarding the Company that was provided to
the Noteholder Ad Hoc Group and its legal and financial advisors,
which consists of the following summary of the
Settlement.
The Settlement provides, among
other things, that (a)the Company will amend (the
Amendment) its First Amended Joint
Prepackaged Plan of Reorganization (the Existing
Plan) to provide that Stones existing stockholders
will receive their pro rata share of (i)5% of reorganized Stones
common stock compared to 4% as contemplated by the Existing Plan,
and (ii)warrants for ownership of 15% of reorganized Stones
common equity exercisable upon the company reaching certain
benchmarks to the terms of the proposed new warrants compared to
10% as contemplated by the Existing Plan, (b)Stone will reimburse
up to $1.0 million of the Stockholder Ad Hoc Groups reasonable
and documented out-of-pocket fees and expenses, (c)no member of
the Stockholder Ad Hoc Group, nor any professional representing
such group, will object or otherwise contest the Existing Plan as
amended by the Amendment, (d)if a Stone stockholder opts-out of
or otherwise interferes with the consummation of the Existing
Plan, as amended by the Amendment, they will not receive their
pro rata share of the common stock or warrants set forth in
clause (a), (e)if an official committee of equity security
holders is appointed by the U.S. Bankruptcy Court for the
Southern District of Texas (the Court),
then Stones existing stockholders will instead receive their pro
rata share of (i)4% of reorganized Stones common stock, and
(ii)warrants for ownership of 10% of reorganized Stones common
equity and (f)the releases and exculpation provisions will
include the Stockholder Ad Hoc Group and its professionals. The
Company expects to file the Amendment with the Court by the end
of the year and expects to file a Current Report on Form 8-K at
that time attaching the Amendment as an exhibit thereto. The
Existing Plan, as amended by the Amendment, remains subject to
approval by the Court. The Court has previously determined that
it would consider the confirmation of the Existing Plan, as
amended by the Amendment, on February14, 2017.
At a hearing on December21,
2016, the Court entered an order resolving the Equity Committee
Motion (the Order). The foregoing description of
the Settlement, which is set forth in the Order, is qualified by
reference to the full text of the Order, a copy of which is
attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
On December22, 2016, the
Company issued a press release announcing the terms of the
Settlement. A copy of the press release is attached hereto as
Exhibit 99.2.
The information contained in
this Current Report on Form 8-K is for informational purposes
only and does not constitute an offer to buy, nor a solicitation
of an offer to sell, any securities of the Company, nor does it
constitute a solicitation of consent from any persons with
respect to the transactions contemplated hereby and
thereby. While the Company
expects the restructuring will take place in accordance with the
Existing Plan, as amended by the Amendment, there can be no
assurance that the Company will be successful in completing a
restructuring.
The information included in
this Form 8-K under Item7.01, including Exhibit 99.1 and Exhibit
99.2, is being furnished and shall not be deemed filed for
purposes of Section18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), or otherwise subject
to liabilities of that Section, unless the registrant
specifically states that the information is to be considered
filed under the Exchange Act or incorporates it by reference into
a filing under the Exchange Act or the Securities Act of 1933, as
amended.
Cautionary Note Regarding
Forward-Looking Statements
Certain statements in this
Current Report on Form 8-K are forward-looking and are based upon
the Companys current belief as to the outcome and timing of
future events. All statements, other than statements of
historical facts, that address activities that the Company plans,
expects, believes, projects, estimates or anticipates will,
should or may occur in the future are forward-looking statements.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein
include, but are not limited to, the ability to confirm and
consummate a plan of reorganization in accordance with the terms
of the Existing Plan, as amended by the Amendment; risks
attendant to the bankruptcy process, including the effects
thereof on the Companys business and on the interests of various
constituents, the length of time that the Company might be
required to operate in bankruptcy and the continued availability
of operating capital during the pendency of such proceedings;
risks associated with third party motions during the bankruptcy
process, which may interfere with the ability to confirm and
consummate a plan of reorganization; potential adverse effects on
the Companys liquidity or results of operations; increased costs
to execute the reorganization in accordance with the terms of a
plan of reorganization; effects on the market price of the
Companys common stock and on the Companys ability to access the
capital markets; and the risk factors and known trends and
uncertainties as described in the Companys Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K as filed with the Securities and Exchange Commission. For a
more detailed discussion of risk factors, please see Part I,
Item1A, Risk Factors of the Companys most recent Annual Report on
Form 10-K and Part II, Item1A of the Companys Quarterly Reports
on Form 10-Q for the periods ended March31, 2016,June30, 2016 and
September30, 2016, respectively. Should one or more of these
risks or uncertainties occur, or should underlying assumptions
prove incorrect, the Companys actual results and plans could
differ materially from those expressed in the forward-looking
statements.The Company assumes no obligation and expressly
disclaims any duty to update the information contained herein
except as required by law.
| Item9.01. | Financial Statements and Exhibits. |
(d)
Exhibits.
|
Exhibit Number |
Description |
|
| 99.1 |
Court Order resolving Equity Committee Motion, dated December 21, 2016 |
|
| 99.2 | Press Release issued by the Company on December 22, 2016 |
About STONE ENERGY CORPORATION (NASDAQ:SGY)