LINN Energy said Wednesday that it will file for Chapter 11 bankruptcy protection.

LINN Energy, LinnCo and Berry Petroleum Company have entered into a restructuring support agreement with the holders of at least 66.67% by aggregate of outstanding principal amounts of LINN’s amended and restated credit agreement, dated as of April 24, 2013, as amended, and Berry’s Second Amended and Restated Credit Agreement, dated as of November 15, 2010, as amended.

In order to implement the terms of the restructuring support agreement, the company filed voluntary petitions for restructuring under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

The company expects its operations across its asset base to continue in the ordinary course throughout the Chapter 11 process.

Under the restructuring support agreement, the parties agreed to support a reorganization plan for the company that would include a new LINN $2.2 billion reserve-based and term loan credit facility on terms established in the restructuring agreement, the consensual use of LINN and Berry’s cash collateral to fund the Chapter 11 cases under negotiated terms and conditions and the broad terms of a comprehensive restructuring of the company’s indebtedness.

The restructuring support agreement was filed as an exhibit to a current report on Form 8-K with the Securities and Exchange Commission on Tuesday.

The company anticipates that cash available to it during its Chapter 11 cases will “likely provide” sufficient liquidity to support the business during the financial restructuring process.

The company does not currently intend to seek debtor-in-possession financing.

Houston-based LINN said it intends to continue paying employee wages and provide healthcare and other defined benefits without interruption in the ordinary course of business.

The company will also pay suppliers and vendors in full under normal terms for goods and services provided on or after the Chapter 11 filing date.

“Like many others in our industry, LINN has been impacted by continued low commodity prices. We believe that these steps will provide us the financial flexibility to successfully manage in the current commodity price environment and, when combined with constructive agreements with our remaining creditors and potential third party financing, will provide a platform for future growth,” LINN Energy chairman, CEO and president Mark E. Ellis said.

LINN warned in March that “significant indebtedness” could prompt it to file for bankruptcy.

In a filing with the Security and Exchange Commission, the company said that month that it was in default under its LINN credit facility and its second lien indenture.

As of February 29, the company had an aggregate amount of $9.3 billion outstanding under its notes and credit facilities, with an additional borrowing capacity of less than $1 million.

LINN reported  a fourth quarter 2015 net loss of $2.5 billion, or $7.05 per unit, and a full year 2015 net loss of $4.8 billion, or $13.87 per unit.

Kirkland & Ellis LLP is serving as legal advisor to LINN, Lazard is serving as its financial advisor and AlixPartners is its restructuring advisor.


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