If I read this correctly - "Chapter 11 petition showed $3.6 billion in assets and $3.5 billion in debt", this means that company is still not in very bad shape? Definitely, the company is listing all assets and liabilities at face value and fair price?
Does it mean, if the company can buy some time to get the drilling started again and sell some assets, they may be in good shape.
if you look back historically at the outcome for shareholders in bankruptcy, 95+ percent of them end up with no value when the company exits BK. I think the chance for ATPG to have value for the common stock will be if they can start generating large cash flows from some of their assets; the fact that assets were listed close to as much as liabilities is not nearly as important. This company will burn through hundreds of millions of dollars in operating losses during BK, plus the ridiculous legal and consulting fees it will have to pay during BK. Look at the second lien debt - it is trading for .27 on the dollar. They will get paid in full before shareholders see anything - if that debt starts trading up to .60, .70 on the dollar, then there's a shot common stockholders will get something.
Thanks eagle for the reply, I am not concerned about what happened, more what may happen which is like GGP BK, they had assets and too much debt which could not be refinanced and stock traded as low as 28 cent but now it is almost $26.
My thought is that if a company declaring assets more than liability, generally, they declare all liabilities in full but are conservative in assets as they don't want to show that they filed BK just for fun as BK judge will not like it, you get my point.
And BTW, do you know, how we can trade bonds, looks like not a bad deal even if the company doesn't survive they have sufficient assets to make bonds full, what you think?