the bid submitted by M5 Midstream LLC (the Stalking Horse Bidder) as the highest or otherwise best bid received for the Assets, subject to the Debtors receipt of any higher or otherwise better bids.
On February 10, 2017, the Debtors and the Stalking Horse Bidder entered into a purchase and sale agreement (the Stalking Horse Agreement) representing a binding bid for the Assets, subject to overbid. The total consideration available to the Debtors under the Stalking Horse Agreement was approximately $151,100,000.00, subject to certain adjustments (the Stalking Horse Purchase Price). The Stalking Horse Agreement included provisions for the payment of a break-up fee and a capped expense reimbursement payable to the Stalking Horse Bidder should the Debtors ultimately enter into a sale transaction for substantially the same assets that are the subject of the Stalking Horse Agreement with another bidder (the Bid Protections). As described in greater detail in Section IV.C below, the Debtors subsequently filed a motion seeking (i) approval of the Stalking Horse Agreement and (ii) approval of certain Bid Procedures (as defined below).
On March 6, 2017, BTA Gathering LLC (BTA) submitted a competing bid to purchase the Assets for $160,000,000.00 and provided to the Debtors a draft purchase and sale agreement (the BTA Purchase Agreement). As discussed in more detail in Section IV.D below, pursuant to the Bid Procedures Order, the Debtors conducted an auction for the Assets on March 10, 2017.
KEY EVENTS DURING THE CHAPTER 11 CASES
A. COMMENCEMENT OF THE CHAPTER 11 CASES AND FIRST DAY MOTIONS
On the Petition Date, the Debtors filed various first-day motions (collectively, the First Day Pleadings) seeking certain immediate relief from the Bankruptcy Court designed to allow the Debtors to continue to operate in chapter 11 and avoid irreparable harm due to the commencement of the Chapter 11 Cases. A description of the First Day Pleadings is set forth in the Declaration of Ed Mosley in Support of the Debtors Chapter 11 Petitions and Related Relief [Dkt. No. 15]. The Bankruptcy Court granted substantially all of the relief requested in the First Day Pleading on either a final or interim basis and entered various orders authorizing the Debtors to, among other things:
· Continue the use of the Debtors cash management system, bank accounts, and business forms;
· Continue paying employee wages and benefits;
· Pay prepetition claims of trade creditors and vendors;
· Pay certain prepetition taxes and assessments; and
· Establish procedures for utility companies to request adequate assurance of payment and to prohibit utility companies from altering or discontinuing service.
B. CASH COLLATERAL
On the Petition Date, the Debtors filed a motion to use cash collateral and provide adequate protection to the Prepetition Secured Lenders in connection therewith. The Bankruptcy Court entered a final order approving the use of cash collateral on February 23, 2017 [Dkt. No. 121]. The Cash Collateral Order permits the Debtors to use Cash Collateral through May 31, 2017.
The Cash Collateral Order contains the following milestones that establish a dual-track process for the Debtors to pursue the Sale Transaction followed by a liquidating plan. The Debtors successfully met all such milestones.