Pacific Energy Creditors Blast DIP 'Scheme'

Law360, New York (June 2, 2009, 12:00 AM EDT) -- Pacific Energy Resources Ltd.'s unsecured creditors have objected to the company's proposed $44 million debtor-in-possession financing, calling it a “de facto plan of liquidation” for the benefit of prepetition lenders that tramples other creditors' rights.

In an objection filed Tuesday in the U.S. Bankruptcy Court for the District of Delaware, the official committee of unsecured creditors in Pacific Energy's bankruptcy said that the prepetition lenders planned to provide DIP financing solely to burden Pacific Energy's estate with debt and force its sale to the lenders, leaving...
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