Tri-Valley Corp., Bakersfield, and its affiliates have filed for Chapter 11 bankruptcy in district court in Delaware.
Tri-Valley has received a debtor-in-possession financing commitment of $11 million by its senior secured lender, George T. Gamble 1991 Trust, of which $3.85 million represents new credit availability, to support business operations during the bankruptcy proceeding.
Upon approval by the bankruptcy court, the new debtor-in-possession financing and cash generated from Tri-Valley’s operations will be used to support the business during the bankruptcy process.
Tri-Valley said it met in June and July with its financial advisor and representatives of the Gamble Trust and the Opus Special Committee to discuss strategic alternatives. The company concluded that the only feasible way to repay creditors and generate a substantial return to Opus investors was to sell the assets, including those at Pleasant Valley and Claflin, in a competitive sale.
The company believes that no value for Tri-Valley stockholders may result from the bankruptcy process, given, among other things, the priority of claims of the company’s secured and unsecured creditors and the resolution of the outstanding alleged claims between Opus, Tri-Valley Corp., and Tri-Valley Oil and Gas.