A federal appeals court opinion flipping the ownership of Texas oil driller Mesquite Energy Inc. to a group of lenders, including Apollo Global Management Inc.turned a crafty arrangement by a bankruptcy judge on its head.
A Houston bankruptcy court’s efforts to fairly split the equity of the company formerly known as Sanchez Energy Corp. among secured and unsecured creditors strayed from a straightforward application of the US bankruptcy code, the US Court of Appeals for the Fifth Circuit ruled last week, handing 100% of the reorganized company to the group of senior secured lenders.
The May 30 decision, …
