Bankrupt Lilis Energy Inc. is switching gears to a sales process after a restructuring agreement with its investor fell through.

The Permian Basin pure-play voluntarily filed for Chapter 11 on June 29, succumbing to bankruptcy following months of struggling to make debt payments. Concurrent with the Chapter 11 petitions, Lilis entered a restructuring support agreement (RSA) with affiliates of Värde Partners Inc. that if consummated was expected to reduce its debt by more than $34.9 million.

However, on Aug. 17, Värde Partners, which collectively own all of Lilis’ outstanding preferred stock, declined to pursue a new money investment in the company to sponsor its Chapter 11 plan of reorganization, Lilis said in a company release.

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