An equity holder of Carbo Ceramics Inc. asked the U.S. Bankruptcy Court for the Southern District of Texas to appoint a committee to represent equity holders of the company in its Chapter 11 case.
In a motion filed in court, Chris Kappos III said “the circumstances under which [equity holders] are being wiped out are suspect, extremely fast, and need further scrutiny.”
“It is simply unfair for the equity holders to be wiped out by a self-interested management team that is doing nothing more than the will of the supporting lenders,” Mr. Kappos said, referring to lenders Wilks Brothers, LLC and Equity Financial LLC.
Wilks Brothers and Equity Financial had earlier reached an agreement with Carbo Ceramics under which they will acquire the company through a debt-for-equity exchange pursuant to the company’s proposed Chapter 11 plan of reorganization.
The plan provides for complete elimination of the interests of all equity interest holders. The disclosure statement detailing the plan was conditionally approved on April 23. A hearing to consider confirmation of the plan is set for June 9.
“From the perspective of equity interest holders, the pace at which this process is proceeding is nothing short of theft of valuable property rights and confirmation by ambush,” Mr. Kappos said.
Accoridng to Mr. Kappos, Carbo Ceramics’ “creation of the perception of extreme urgency appears to have been designed to accomplish a transfer of disclosed, under–disclosed, and undisclosed assets of significant value” to the lenders before the equity holders would be able to present “alternative values and opportunities” to the court and creditors.
Mr. Kappos is represented by:
Bruce W. Akerly, Esq.
Akerly Law PLLC
878 S. Denton Tap Road, Suite 100
Coppell (DFW), TX 75019
Phone: (469) 444-1864
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David R. Haberbush, Esq.
444 West Ocean Blvd., Suite 1400
Long Beach, California 90802
About CARBO Ceramics
CARBO Ceramics Inc. is a global technology company providing products and services to the oil and gas, industrial, and environmental markets. CARBO offers oilfield ceramic technology products, base ceramic proppant, and frac sand proppant for use in the hydraulic fracturing of oil and natural gas wells.
Asset Guard Products Inc., a subsidiary of CARBO, offers products intended to protect operators’ assets, minimize environmental risks, and lower lease operating expenses through spill prevention, containment, and countermeasure systems for the oil and gas industry.
StrataGen, Inc., another subsidiary, offers fracture consulting and data services and provides a suite of stimulation software solutions used for designing fracture treatments and for on-site real-time analysis to assist E&P companies in the efficient completion of wells and enhancement of oil and natural gas production.
CARBO Ceramics Inc. and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-31973) on March 29, 2020. At the time of the filing, the Debtors were estimated to have assets of between $100,000,001 and $500 million and liabilities of the same range.
Judge Marvin Isgur oversees the cases.
Debtors tapped Vinson & Elkins LLP as bankruptcy counsel; Okin Adams LLP as special counsel; Perella Weinberg Partners L.P. and Tudor Pickering, Holt & Co. as investment banker; FTI Consulting, Inc. as financial advisor; Ernst & Young LLP, KPMG LLP, and Weaver and Tidwell L.L.P. as accountants and tax advisors. Prime Clerk, the claims agent, maintains this website https://dm.epiq11.com/case/crc/info