From The Wall Street Journal
Triangle Petroleum Corp. , which has interests in North Dakota’s energy and commercial real-estate markets, filed for bankruptcy Wednesday with a reorganization plan under which bondholder J.P. Morgan Securities LLC will get all of the equity.
Triangle’s debt consists mostly of a $2 million secured term loan from JPMorgan Chase Bank NA and $167 million under a secured bond J.P. Morgan Securities bought from another investor.
J.P. Morgan Securities was no longer willing to extend forbearance, which would expire May 19, Chief Executive Ryan McGee said in a filing in U.S. Bankruptcy Court in Wilmington, Del.
Triangle said J.P. Morgan Securities is the sole holder of the secured bond, which is the only class entitled to vote on the reorganization plan, and that the bondholder has agreed to the balance sheet restructuring. J.P. Morgan Securities is expected to recover up to 43 cents on the dollar of what it is owed, the filings said.
The company said general unsecured claims—those of small vendors and professionals—will be paid in full. The $2 million secured loan will be converted into exit financing. J.P. Morgan Securities will select the new board of the reorganized business. Equity investors will receive nothing under the plan.
Denver-based Triangle’s shale drilling operations are focused in the Williston Basin in North Dakota and Montana.
Triangle does business through two subsidiaries that aren’t part of the bankruptcy. The company holds a large joint venture stake, along with an affiliate of BlackRock Inc., in Caliber Midstream Holdings LP, a pipeline transportation and oil-and-gas gathering operation focused mostly in North Dakota.
The other is Bakken Real Estate Development LLC, which leases commercial and apartment buildings in North Dakota and is currently Triangle’s only consistent revenue source. Triangle formed Bakken in 2012 to provide commercial and housing options during an oil-and-gas boom.
Triangle has one employee. It said its chief assets include its stakes in Caliber and Bakken, as well as net operating losses that could be used to offset future income to reduce federal taxes.
The company is no stranger to bankruptcy. In 2016, subsidiaries that included Triangle USA Petroleum Corp. and Ranger Fabrication LLC filed for bankruptcy. The company emerged from chapter 11 the following year under the control of its bondholders, including J.P. Morgan Securities.
Triangle said its stock was delisted from the New York Stock Exchange in 2017 but that the shares, some 76 million outstanding, still trade over the counter.
Triangle hopes to get the plan confirmed by mid-June.
ActOil Bakken LLC owns almost 15% of Triangle, the chapter 11 petition said. ActOil is owned by Teachers Insurance and Annuity Association of America, according to a 2013 Securities and Exchange Commission filing. TIAA couldn’t be reached for immediate comment Wednesday, but ActOil’s address in the 2013 SEC filing is the same address given for ActOil in the bankruptcy petition listing Triangle’s biggest equity holders.
Young Conaway Stargatt & Taylor LLP and Paul Weiss Rifkind Wharton & Garrison LLP represent Triangle. Duane Morris LLP represents J.P. Morgan Securities. The case, number 19-11025, is assigned to Judge Mary Walrath.
