Oilfield Company Files for Bankruptcy in Delaware After $250 Million Default
Because of its flexible corporate laws and beneficial state corporate income tax, many companies choose to incorporate in the state of Delaware. Because these companies are incorporated in Delaware, they often will file for bankruptcy in the Delaware district court even though their primary place of business might be located in another state.
One such example of a Delaware corporation whose main operations are outside of the state is Green Field Energy Services:
- As reported by Bloomberg, Green Field Energy, based in Lafayette, Louisiana, filed for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The company, an oilfield service provider, defaulted on a loan in September 2013. The default caused a second default on $250 million of secured notes.
- In addition, according to Moody’s Investor Services, the company did not have enough cash flow to pay its expenses or make mandatory regular debt payments. The purpose of filing its Chapter 11 was to reorganize its debts and continue operations.
While filing for bankruptcy in Delaware is, in many ways, similar to other states, there are some differences. For example, debtors who file for Chapter 7 or Chapter 13 bankruptcy are only entitled to Delaware property exemptions. They are not entitled to choose federal exemptions, unlike debtors in many other states. In addition, the Delaware bankruptcy court has many local rules and orders affecting all types of bankruptcy, which are regularly updated. If you are considering filing for bankruptcy in Delaware to protect your business or personal assets, a skilled bankruptcy lawyer can help you choose where to file and what type of bankruptcy would best protect your interests.