Source: Zero Hedge
With US shale companies facing a tsunami of defaults, some companies took the initiative and filed for bankruptcy ahead of the (viral) curve, so to speak, well before of the current corona/crude chaos.
One such company is EP Energy, an El Paso Corp spinoff which filed for bankruptcy in 2019 as a result of the shale sector’s renewed slump (and this was when oil was still above $50). So with its its fate already in limbo after a busted rescue deal, and potential liquidation looming as a result of oil prices that just insultingly low, the company added a new possibility of what could go wrong next: the company’s bankers may follow it down the bankruptcy abyss.
In its latest annual report filed late on Wednesday, Bloomberg uncovered that among EP’s list of risk factors the company also included the future of its debtor-in-possession loan which is EP’s primary source of cash, and – in an a delightful case of suicidal snark, the company wondered if that might be cut off, along with funds that would enable it to exit bankruptcy, if its banks were themselves to fail.
“Our primary source of liquidity beyond cash flow from operations is our
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