F3 Capital Alleges Vantage Shareholders Being Frozen Out of Vantage Chapter 11 Bankruptcy

Jan 12, 2016, 12:47 ET from F3 Capital

HONG KONG, Jan. 12, 2016 /PRNewswire/ -- Following the news that Vantage Drilling Company subsidiaries filed for Chapter 11 bankruptcy protection on 3 December 2015 pursuant to a Restructuring Agreement with Vantage Drilling Company ("Vantage"), a publicly traded company, which was to file a voluntary winding up petition in the Cayman Islands, fresh concerns have been raised regarding the lack of transparency and disclosure in the bankruptcy procedure.

Mr. Nobu Su, the sole owner of F3 Capital which is a shareholder of Vantage, and the Chairman of Taiwanese shipping firm TMT, like other shareholders received the Plan Supplement for the subsidiaries bankruptcy on Christmas Eve with limited time to review over the holidays with few business days before the 7 January 2016 deadline to object. His counsel has openly expressed his concerns regarding the bankruptcy case proceeding at an unusually fast pace and at shareholders being frozen out of the process.

He commented: "This case is procedurally unique because there appears to be a race by the Debtors to get the Plan confirmed before a liquidator can be appointed for Vantage Drilling Company. It would have been in all parties best interests and in the interests of transparency and disclosure - which we expect from public companies - to have a liquidator appointed to independently act for Vantage in the Bankruptcy." The winding up petition was ultimately not filed by Vantage but by Wells Fargo, a creditor. It appears that shareholders should have had a right to vote on a special resolution for the voluntary filing that Vantage agreed to in the restructuring agreement.

"More unusual is the potential for a Bankruptcy to be approved with the Debtors never filing Schedules or Statements of Financial Affairs, leaving all parties in the dark as to: the actual liabilities, executory contracts, potential litigation claims owned by the Debtors or which may exist against the Debtors, potential maritime liens, the names of creditors and amounts alleged to be owed, etc. This raises the question of how the attorneys in the case can even do a full conflicts check when the Debtors fail to list the parties with interests in the estate?" 

"Furthermore, if Vantage was insolvent and apparently insolvent for some time, why did Vantage advertise in SEC records that it would be listed for trading on the OTC after NYSE MKT delisted Vantage and that its liquidity position is 'strong at about $250 million'. How were the officers and directors meeting their fiduciary duties to shareholders by seeking to have a company they believed to be insolvent continue to be listed after it had already been delisted?"

Commenting on the Restructuring Agreement, Mr. Su says: "It appears to be a plan designed to privatize a public company by transferring the public company's assets to its private subsidiaries while contemporaneously seeking liquidation of the public company without a shareholder vote to the detriment of shareholders' rights."

He concludes: "It certainly seems that the deal was done with the intention of wiping out current shareholders of Vantage to the benefit of management and existing creditors."

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SOURCE F3 Capital