Creditors seek to wind up zombie US energy firms

Petitions for involuntary bankruptcy filed against 3 firms with US$2b in combined debt

Wilmington, Delaware

RISING financial stress in the US energy sector has prompted some suppliers and vendors to take unusual legal action to collect unpaid debts: forcing struggling companies with billions of dollars in debt into bankruptcy.

Since August, creditors have filed petitions for involuntary bankruptcy against three energy producers with nearly US$2 billion in combined debt: Miller Energy Resources Inc, Black Elk Energy Offshore Operations and Energy & Exploration Partners Inc. During that period, there have been a total of seven bankruptcies involving energy companies with at least US$200 million in debt.

Involuntary bankruptcies signal deepening pessimism about the crude market outlook...

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