This is a follow up to my article on the bonds of Geokinetics (GOK). There are two critical dates coming up in the pre-pack bankruptcy scheduled for April 3rd and April 25th.
On April 3rd, the bankruptcy court will hear sixteen motions related to the administration of the planned restructuring. These motions are standard procedure for a restructuring but it is important to pay attention to a couple of things:
- Any unexpected motions brought by creditors or equity holders that are not currently on the docket
Any material movement in price on April 3rd or 4th should be watched closely.
To monitor the situation, you can check here.
The far more important date for GOK is on April 25th where the court will rule on the Plan of Reorganization. If approved, the plan calls for the conversion of debt to the new common equity. At or around this time, the bonds will stop trading. If you have a position and don't want to hold the new equity, time is running out on closing your position.
That being said, if your intention is to hold the new equity, that should occur on or around April 25th. Along with this timing, the value of the equity will be known as the plan is approved.
Last but not least, the court can always throw a curve ball and ask for additional information, make recommendations or otherwise rule against the plan. However, pre-packaged bankruptcies rarely suffer from such issues and as such, the bonds have held pretty much flat since the company filed in March.
If you have any position in GOK bonds or if you are curious to learn about how a corporate bankruptcy plays out in the real world, pay attention to the proceedings in GOK on April 3rd and April 25th.
Additional disclosure: I am long the bonds of GOK (CUSIP: 37252CAB6)