Have you suffered losses investing in RAAM Global Energy Company bonds? If so, the securities attorneys of The White Law Group may be able to help you recover your losses with a FINRA arbitration claim against the brokerage firm that recommended the bonds to you.
RAAM Global Energy Company (RAAM) is a privately held oil and natural gas exploration and production company engaged in the exploration, development, production and acquisition of oil and gas properties. Its operations are located in the Gulf of Mexico, offshore Louisiana and onshore Louisiana, Texas, Oklahoma, California and New Mexico. It focuses on the development of both conventional oil and gas plays and unconventional resource plays.
RAAM Global Energy Co, one of the biggest energy companies in the U.S., announced that it had filed for Chapter 11 bankruptcy protection. According to a Bloomberg Brief report, RAAM’s filing continues a Chapter 11 bankruptcy trend for oil and gas companies due to the substantial drops in commodities’ prices. As a result, the company now seeks an asset auction sale, which the State of Louisiana has filed an objection against.
In its court documents, RAAM cited insolvency on one of its oil production fields in Texas and no foreseeable future recovery in oil and gas prices as its reasons for filing for Chapter 11 bankruptcy protection. According to reports, RAAM had accrued substantial debt for its offshore drilling operations in the Gulf of Mexico and its fields in Texas, Oklahoma and Louisiana following the initial collapse in oil and gas commodity prices in 2014.
The company listed assets comprised of between $1 million and $10 million, with staggering liabilities ranging from $100 million to $500 million. Its current debt load stands at $238 million in senior secured notes, with an additional $63.8 million in loans. In its bankruptcy petition, RAAM also stated that it failed to make an interest payment on its senior secured notes, which forced the company to seek debt refinancing in June.
As part of its restructuring attempt, RAAM requested that its senior secured debt holders exchange the notes for 1.17 million in company common stock shares as well as a portion of new notes valued at $50 million. This attempt failed when it did not reach its 99 percent requirement as only 94.77 percent of senior secured noteholders agreed to the deal.
After it failed to secure the exchange deal, the company could not refinance its debt, which meant that it could not fund a new offshore drilling project because it could not obtain the necessary permits. This caused RAAM $186 million in after-tax losses, a write-down of $277 million and cutting 8.4 million crude oil barrels out of its production. As a result, the company became insolvent after it only reported $33.4 million in revenues as of June of this year.
RAAM stated in its bankruptcy filings that it intends to sell off its remaining assets through an auction process. According to Law 360, the company will seek a stalking horse bidder with approximately 99 percent of its debtors involved with the $85 million term-loan-financing facility reached in 2014.
The White Law Group continues to investigate the liability that brokerage firms may have for recommending the RAAM Global Energy Company 12.5% 10/1/2015 bonds to their clients. For more information click here.
Brokerage-firms and investment adviser are required to make investment recommendations that are suitable for their clients in light of their clients particular investment situation – net worth, investment objectives, income, and investment experience. Brokerage firms or advisors who sell junk bonds to unsuitable investors or fail to adequately disclose the risks of the investments can be held accountable for losses suffered through a FINRA arbitration claim.
If you have concerns regarding your investment in RAAM Global Energy Company bonds and would like to speak with a securities attorney about your litigation options, please call The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
To learn more about The White Law Group visit www.whitesecuritieslaw.com.