In an 8-K filed yesterday, Edge Petroleum announced what many had known for a long time, that it may filed for Chapter 11. Earlier the company had hired restructuring law firm Akin Gump to advise on financial and strategic alternatives. On January 8 credit facility agent Bank of California essentially pulled the plug on the company when it lowered Edge's borrowing base to $125 from $240 million, which immediately put it in technical default as its L/Cs and outstanding were higher than the borrowing base by $114 million.In the 8-K, Edge states "there can be no assurance that the Company will reach [an] agreement with its lenders with respect to any restructuring and if not, will be able to make the required payments with respect to the Deficiency when they become due. Moreover, there can be no assurance that the Company’s ongoing efforts to evaluate and assess its various financial and strategic alternatives (which may include the sale of some or all of the Company’s assets, the merger or other business combination involving the Company, restructuring of the Company’s debt or the issuance of additional equity or debt) will be successful. If such efforts are not successful, the Company may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code."
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