Forward Motions: Siga Creditors to Seek Permission to Investigate Ex...

In an Austin, Texas, courtroom Monday, WBH Energy LP will ask a bankruptcy judge to approve bidding procedures that could see the company’s assets sold for at least $25 million.

WBH Energy’s lender, investment firm Castlelake LP, has agreed to serve as the lead bidder at an upcoming bankruptcy auction. The lender intends to credit bid—or offer to forgive some of the debt it is owed—for the independent oil company’s assets.

WBH is asking for at least $15 million for its oil and gas properties, some 2,570 acres throughout the Barnett Shale region in Texas. It has 39 wells in operation and six others drilled. The company is also seeking at least $10 million for its personal property.

Under the proposed auction rules, Castlelake, formerly known as TPG Credit, is required to simultaneously bid on the oil and gas properties and the personal property. If a judge blesses the company’s proposed timeline, bids will be due July 31, with an auction held Aug. 10. A sale hearing is slated for Aug. 12.

WBH Energy, which filed for chapter 11 protection in January, is one of a number of oil and natural gas companies that have been grappling with a sharp drop in oil prices since last June.

Wednesday in U.S. Bankruptcy Court in Manhattan, creditors of smallpox vaccine maker Siga Technologies Inc. will seek permission to investigate the role the drug maker’s executives played in a dispute with PharmAthene Inc. that drove Siga into bankruptcy.

Siga’s official committee of unsecured creditors also said in court filings that they want to investigate the 2011 sale of stock by several Siga directors just before an announcement that the company was getting a significantly smaller contract to sell its smallpox vaccine. News of the lower-value contract caused a major selloff in Siga stock.

Such requests are common in bankruptcy. Creditors have the right to conduct investigations and often make these demands when they feel a company won’t investigate itself. Siga’s creditors hold about $200 million in claims in the case.

Siga, which contributes its smallpox vaccine to the U.S. Strategic National Stockpile, filed for bankruptcy in September after losing a long-running licensing dispute with PharmAthene. Earlier this year, a Delaware judge set the amount Siga owes PharmAthene at $113.1 million, which is expected to be more than $190 million after interest is added.

Meanwhile, Chassix Holdings Inc. will be in U.S. Bankruptcy Court in Manhattan on Thursday to win a court’s permission to send the terms of its prepackaged restructuring plan to an official creditor vote.

Chassix, a parts supplier to large auto makers, filed for chapter 11 last month with a plan that it said has the support of a majority of its bondholders. The plan, which calls for the conversion of approximately $533 million in notes to equity, is expected to reduce Chassix’s funded debt level by 68%.

The parts maker, owned by private-equity firm Platinum Equity LLC, also plans to rework contracts with big auto makers including General Motors Co., Ford Motor Co. and Chrysler.

Chassix’s decision to file for bankruptcy followed a “perfect storm” of events over the past year, the company said, including underpriced contracts and a spike in demand for cars in North America that overwhelmed its manufacturing facilities.

The company, which has more than 4,500 employees, makes steering knuckles, control arms and brake components. It was formed in 2013 when Platinum, run by Detroit Pistons basketball team owner Tom Gores, merged two companies it previously bought.

At Thursday’s hearing, Chassix will also ask the court for permission to dole out $2.4 million in retention bonuses to 69 employees it considers “critical” to running its business. Chassix said the bonus offers, which were made before its chapter 11 filing, were a response to an increased employee turnover rate during a tumultuous 2014.

-Patrick Fitzgerald and Joseph Checkler contributed to this article.

Write to Sara Randazzo at [email protected]. Follow her in Twitter at @sara_randazzo