Valerus Duped Into Upping Equity In Credit Deal, Court Told

Law360, Houston (April 22, 2013, 11:21 PM EDT) -- The vice chairman of Valerus Compression Services LP told a Texas judge Monday that the oil and gas field service company was hoodwinked by Guggenheim Corporate Funding LLC into trading a larger than anticipated equity stake in exchange for a $165 million credit facility.

Chet Erwin told Judge Randy Wilson that during negotiations with Guggenheim for the needed cash infusion, Valerus unwittingly signed off on revised warrants securing the loan that conveyed a 3.5 percent stake in the company that incorrectly contained an “anti-dilution” provision. Erwin...
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