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Rooster Energy LLC, embroiled in a squabble with one of its lenders, has sought bankruptcy protection.
The oil-and-gas company said in court papers filed Friday that it is in the midst of “liquidity crises” caused by plummeting commodities prices and the tight leash imposed on it by lender Angelo Gordon Energy Servicer LLC.
Following more than a year of amendments, forbearance agreements and negotiations with the lender—the agent on $53.3 million in senior secured notes—Rooster said it was pushed toward a bankruptcy filing.
Chief Executive Kenneth F. Tamplain Jr. said in the court papers that Angelo Gordon’s watchful eye over the company since 2014 led to the cash crunch that prevented Rooster from being able to conduct its normal business operations. He said Angelo Gordon restricted Rooster’s cash flow and increased interest payments and “further involved themselves in the minutiae of the debtors’ businesses.”
Angelo Gordon shot back Monday in an objection to most of Rooster’s first-day requests. In court papers, the firm’s attorneys said the chapter 11 filing came as a surprise, as Angelo Gordon thought “they were negotiating a pre-arranged chapter 11 case with the debtors to be filed in the next few weeks.” Instead, the attorneys said, “the debtors filed bankruptcy with no advance warning and no advance preview of pleadings or proposed forms of order with its largest creditor constituent.”
The lender went on to call the chapter 11 filing “a thinly veiled attempt” to put company insider and Rooster Canada Chairman Chester F. Morrison Jr. in the driver’s seat. Mr. Morrison provided the proposed $525,000 debtor-in-possession financing to Rooster, of which $213,000 was given to the company before the filing, court papers show.
“In exchange for a mere incremental $312,000 of postpetition financing to be used for an undetermined purpose, Morrison seeks to gain extraordinary relief and bootstrap leverage over the cases on the first day of the bankruptcy cases to the detriment of all creditors, including the holders,” Angelo Gordon said in court papers Monday.
A spokesman for Angelo Gordon didn’t immediately comment on the matter. Attorneys for Rooster didn’t immediately respond.
Rooster’s capital structure also includes $24 million in senior subordinated debt, $7.1 million in unsecured trade debt, and $10.2 million in long-term trade debt owed to Chet Morrison Contractors LLC, which is owned and controlled by Mr. Morrison.
The Canadian oil-and-gas company Rooster Canada Ltd. acquired Rooster Energy in 2012, and later bought majority stakes in Cochon Properties LLC and Morrison Well Services LLC in 2014. Rooster Canada operates under the Rooster Energy name.
Through Morrison Well Services, Rooster focuses on the delivery of well intervention services, including well plugging and abandonment, as well as the development of resources in the shallow waters of the Gulf of Mexico.
Judge Robert Summerhays of the U.S. Bankruptcy Court in Lafayette, La., is overseeing the case, which will hold its first-day hearing on Monday. Baker, Donelson, Bearman, Caldwell & Berkowitz PC are serving as Rooster’s legal advisers.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com