March 19, 2016 Comments (0) Blog

Investor Alert: Venoco, Inc. Files Bankruptcy Protection

(Last Updated On: August 23, 2016)

Have you suffered losses investing in Venoco, Inc.?  If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Denver- based oil driller Venoco Inc. is an independent energy company engaged in the acquisition, exploration and development of oil and natural gas properties. It was founded in 1992 by Timothy Marquez.

Venoco filed for bankruptcy protection March 18, citing the tanking oil markets and a spill that hurt some of its production near Santa Barbara, CA.

The petition filed in Delaware court listed as much as $1 billion in debt. Venoco said it has the support of some lenders on a restructuring plan. The company’s primary assets are oil-weighted and located onshore and offshore in Southern California.

Venoco, like many other oil and gas companies, struggled this past year to maintain liquidity due to dropping oil prices. In addition, in May 2015 a pipeline ruptured, resulting in a spill near Refugio Beach State Park and stopping Venoco’s production at its South Elwood Field location, 2 miles off the Santa Barbara shore, according to court filings.

The company’s debt includes $175 million in 12 percent first-lien senior secured notes due 2019, $164.1 million in second-lien secured notes, $308.2 million in 8.875% senior notes and $303 million outstanding under another set it refers to as its senior PIK toggle.

High-yield bonds—also called non-investment-grade bonds, speculative-grade bonds, or junk bonds—are bonds that are rated below investment grade, typically ‘BB’ or lower by Standard & Poor’s and ‘Ba’ or lower by Moody’s. They pay high yields to bondholders because the borrowers credit ratings are less than pristine, making it difficult for them to acquire capital at an inexpensive cost. Junk bonds carry an above average risk that the issuer will default on the bond. The increased risk makes them arguably unsuitable for many investors.

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 Venoco, Inc. 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.