Item 1.01 Entry Into Material Definitive Agreement.
As previously disclosed, on June 28, 2020, Lilis Energy, Inc., a Nevada
corporation (the "Company"), and its consolidated subsidiaries Brushy Resources,
Inc., ImPetro Operating LLC, ImPetro Resources, LLC, Lilis Operating Company,
LLC and Hurricane Resources LLC (collectively, the "Filing Subsidiaries" and,
together with the Company, collectively, the "Debtors") filed voluntary
petitions seeking relief under Chapter 11 of Title 11 of the United States Code
(the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the "Bankruptcy Court") commencing cases
for relief under Chapter 11 of the Bankruptcy Code (the "Chapter 11 Cases"). In
connection with the Chapter 11 Cases, on June 30, 2020, the Company entered into
that certain Senior Secured Super-Priority Debtor-in-Possession Credit Agreement
(as amended on August 17, 2020, August 21, 2020, August 28, 2020, September 8,
2020, September 30, 2020, October 7, 2020, and October 30, 2020, the "DIP Credit
Agreement") with the Filing Subsidiaries, as guarantors, BMO Harris Bank N.A.,
as administrative agent (the "Administrative Agent"), and the lenders party
thereto (the "Lenders").
On November 24, 2020, the Company, the Filing Subsidiaries, the Administrative
Agent and the Lenders entered into a Seventh Amendment (the "Seventh Amendment")
to the DIP Credit Agreement. The Seventh Amendment, among other things, amended
the Scheduled Maturity Date (as defined in the DIP Credit Agreement) and certain
provisions related to the repayment and prepayment of the Loans (as defined in
the DIP Credit Agreement).
On December 2, 2020, the Company, the Filing Subsidiaries, the Administrative
Agent and the Lenders entered into an Eighth Amendment (the "Eighth Amendment")
to the DIP Credit Agreement. The Eighth Amendment, among other things, amended
the Scheduled Maturity Date (as defined in the DIP Credit Agreement).
The foregoing descriptions of the Seventh Amendment and the Eighth Amendment do
not purport to be complete and are qualified in their entirety by reference to
the full text of the Seventh Amendment and Eighth Amendment, which are filed as
Exhibit 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
Item 1.03 Bankruptcy or Receivership.
As previously disclosed, on November 17, 2020, the Bankruptcy Court entered an
order (the "Confirmation Order"), among other things, confirming the Modified
Debtors' First Amended Joint Liquidating Chapter 11 Plan [Docket No. 647] (as
amended, modified or supplemented from time to time, the "Plan"). The Plan is
attached to the Confirmation Order as Exhibit A. Capitalized terms used but not
otherwise defined in the Current Report on Form 8-K have the meanings given to
them in the Plan.
On December 4, 2020, all conditions precedent to the Plan's effectiveness were
satisfied or waived in accordance with the Plan (the "Effective Date"). Each of
the Debtors has been dissolved and cease to exist, effective as of the Effective
Date after the transfer of any remaining assets of their respective estates to
the Liquidation Trust pursuant to the terms of the Plan, and all existing
certificates of incorporation and by-laws will be cancelled, effective as of the
Effective Date, and no new certificates of incorporation and by-laws will be
necessary
As described in the Company's Current Report on Form 8-K filed on November 16,
2020, the Debtors entered into a Purchase and Sale Agreement to sell
substantially all of their Assets for a cash purchase price of $46.6 million,
subject to customary adjustments (the "Sale"), which sale closed on December 1,
2020. After the payment of certain claims on the Effective Date made in
accordance with the terms of the Plan, remaining net cash proceeds from the
Sale, together with any miscellaneous assets not sold pursuant to the Sale,
including certain causes of action, have been contributed to the Liquidation
Trust as part of the Liquidation Trust Assets. The Company's notes, instruments,
certificates, credit agreements, indentures and other documents evidencing
Claims or Interests, and any Existing Equity Interests, including all
outstanding shares of common and preferred stock of the Company, have been
cancelled as of the Effective Date.
The foregoing description of the Plan is not complete and is qualified in its
entirety by reference to the Plan and the Confirmation Order. The Confirmation
Order, which includes the Plan attached as Exhibit A thereto, is attached to the
Company's Current Report on Form 8-K filed on November 23, 2020 as Exhibit 2.1
and is hereby incorporated by reference in this Item 1.03.
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Item 4.01Changes in Registrant's Certifying Accountant.
On December 3, 2020, BDO USA, LLP ("BDO") confirmed that our relationship with
them as our independent registered public accounting firm has ceased. During
the year ended December 31, 2019, and the subsequent interim period through
December 3, 2020, there were no disagreements between the Company and BDO on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of BDO, would have caused BDO to make reference to the subject
matter of the disagreement in their reports on the Company's consolidated
financial statements for such time period.
The Company provided BDO with a copy of this Current Report on Form 8-K and with
the statements made herein. BDO furnished the attached letter addressed to the
Company. The BDO letter is attached hereto as Exhibit 99.1.
Item 7.01Regulation FD.
On December 2, 2020, the Company issued a press release announcing the closing
of the sale of substantially all of the assets of the Debtors and the closing of
the Sale, such press release furnished herewith as Exhibit 99.2.
Information regarding the Chapter 11 Cases is available for free on the website
maintained by Stretto, located at https://cases.stretto.com/LilisEnergy or by
calling (855) 364-4639 (Toll-Free) or (949) 266-6357 (Local).
The information contained in this Item 7.01 (including other information on the
Chapter 11 cases on the above referenced website and in the press release filed
as Exhibit 99.2) is furnished pursuant to this Item 7.01 and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or
otherwise subject to the liabilities of that Section, notwithstanding any
general incorporation by reference language in other filings by the Company.
Item 9.01 Exhibits.
(d) Exhibits.
Exhibit Number Description
Seventh Amendment to Senior Secured Super-Priority
Debtor-in-Possession Credit Agreement dated as of November 24, 2020,
among Lilis Energy Inc., the guarantors party thereto, BMO Harris
10.1 Bank N.A., as administrative agent, and the lenders party thereto .
Eighth Amendment to Senior Secured Super-Priority
Debtor-in-Possession Credit Agreement dated as of December 2, 2020,
among Lilis Energy Inc., the guarantors party thereto, BMO Harris
10.2 Bank N.A., as administrative agent, and the lenders party thereto.
Letter, dated December 3, 2020 from BDO USA, LLP to Lilis Energy,
99.1 Inc.
99.2 Press Release of the Company dated December 2, 2020.
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