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Item 1.03.
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Bankruptcy or Receivership.
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On March 14, 2021, HighPoint Resources Corporation (“HighPoint” or the “Company”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the District of Delaware (the “Court”) to effectuate the previously announced prepackaged plan of reorganization (the “Prepackaged Plan”) and consummate the transactions pursuant to the Agreement and Plan of Merger, dated as of November 9, 2020, by and among Bonanza Creek Energy, Inc. (“Bonanza Creek”), HighPoint and Boron Merger Sub, Inc (the “Merger Agreement”). The Company has filed a motion with the Court seeking joint administration of the Chapter 11 Cases under the caption In re HighPoint Resources Corporation, et. al.
The Prepackaged Plan implements the merger and restructuring transactions contemplated under the Merger Agreement and TSA (as defined below). The Prepackaged Plan includes the following key features. Capitalized terms used in the summary below but not otherwise defined herein have the meaning given to such terms in the Prepackaged Plan.
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Cancellation of Notes Claims in Exchange for Bonanza Creek Common Stock and New 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.
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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).
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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.
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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.
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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 November 9, 2020, by and among HighPoint, HighPoint OpCo, Fifth Pocket Production, LLC, certain consenting holders of the 2022 Notes and 2025 Notes, and certain consenting HighPoint stockholders, and related transaction documents.
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 February 10, 2021, and which forms part of a Registration Statement of Bonanza Creek on Form S-4 (File No. 333-251402). The foregoing descriptions of the Merger Agreement and TSA do not purport to be complete and are qualified in their entirety by reference to the complete Merger Agreement and TSA, each of which is filed as Exhibit 2.1 and Exhibit 10.2, respectively, to HighPoint’s Current Report on Form 8-K, dated as of November 9, 2020.