ENGLEWOOD, Colo., Jan. 17, 2019 (GLOBE NEWSWIRE) — Ultra Petroleum Corp. (“Ultra Petroleum” or the “Company”) (NASDAQ: UPL) announces that earlier today, the U.S. Court of Appeals for the Fifth Circuit delivered a favorable opinion in the appeal proceedings by Ultra Petroleum about the make-whole claims that had been asserted against the Company. This is a victory for Ultra Petroleum, reversing a bankruptcy court decision that had required the Company to pay approximately $400 million to various creditors following the Company’s emergence from Chapter 11 proceedings.
“We are very pleased with the Fifth Circuit’s decisive opinion reversing and remanding the prior judgment against Ultra Petroleum. We remain committed to this appeals process and ultimately believe the outcome of any final decision will be consistent with today’s Fifth Circuit ruling, which would result in the recoupment back to the Company of up to approximately $260 million of non-settled claim amounts that were previously paid out by the Company to various creditors,” said Brad Johnson, Interim CEO.
After the Company and its subsidiaries petitioned for reorganization under Chapter 11 in 2016, certain creditors asserted that they were entitled not just to principal and pre-petition interest on certain debt instruments, but also to a contractual “make-whole” premium and post-petition interest at a contractually defined rate. On appeal, the Fifth Circuit reversed the bankruptcy court’s decision and remanded for further proceedings. The Fifth Circuit rejected the bankruptcy court’s determination that the creditors had been impaired merely by operation of the Bankruptcy Code, holding instead that creditors are impaired only if a reorganization plan itself alters legal, equitable, or contractual rights. The Fifth Circuit expressed “doubt” that the creditors are entitled to payment of the make-whole and indicated that the creditors’ claim for the make-whole premium would be disallowed under the Bankruptcy Code. Finally, the Fifth Circuit indicated that post-petition interest should be determined according to the statutory federal judgment rate, rather than at a higher contractual rate.
About Ultra Petroleum
Ultra Petroleum Corp. is an independent energy company engaged in domestic natural gas and oil exploration, development and production. The Company is listed on NASDAQ and trades under the ticker symbol “UPL”.