Quicksilver ordered to continue making royalty payments

Quicksilver Resources will continue to make royalty payments and honor other working interest obligations following an order signed by a bankruptcy judge last week.

U.S. District Court Judge Laurie Silverstein in Delaware signed the order April 14 and rescheduled until May 12 a hearing to review Quicksilver’s ongoing operational costs, including paying its employees. The judge said the pre-bankruptcy petition claims cannot go beyond $39.3 million.

At the hearing next month, Quicksilver will also ask the court to continue paying John Little, a Deloitte Transactions and Business Analytics employee, $20,000 a week to work as Quicksilver’s strategic alternatives officer as it makes its way through Chapter 11 bankruptcy.

Quicksilver filed for bankruptcy on March 17 and the U.S. Trustee appointed an official committee of unsecured creditors. A trustee or examiner has not yet been named.

According to documents filed in U.S. Bankruptcy Court in Wilmington, Del., the company reported $1.21 billion in assets and $2.35 billion in debts.

The Chapter 11 filing does not include Quicksilver’s Canadian subsidiary, which reached a temporary agreement with creditors to avoid default on those assets until at least June 16.

Little originally was brought on in September to work with senior Quicksilver management and help them identify joint-venture partners and market company assets.

The Fort Worth-based company made a big move into the Barnett Shale and other natural gas fields across the country and in Canada in the last decade, but then struggled with a big debt load after natural gas prices collapsed.

Listed among its top 30 creditors are Wilmington Trust National Association ($361.6 million); Delaware Trust Co. ($332.6 million); and U.S. Bank National Association ($312.7 million).

The company also owes millions to several pipeline companies including Oasis Pipeline and Energy Transfer Fuel.

Among the entities filing a notice of appearance with the bankruptcy court were the Texas Comptroller, the Northwest Independent School District, the city of Haslet, the Texas Motor Speedway and their landlord, Behringer Harvard Burnett Plaza.

This story was originally published April 20, 2015 at 3:36 PM with the headline "Quicksilver ordered to continue making royalty payments."