The White Law Group continues to investigate Linn Energy LLC and Breitburn Energy Partners LP. Both are upstream MLPs in the energy patch that were given easy access to cash and went into deep debt when oil prices were up at $105/bbl and expected to rise.
An independent oil and natural gas company, Linn Energy LLC acquires and develops oil and natural gas properties in the United States, according to their website. Its properties are located in the Hugoton Basin, the Rockies, California, east Texas and north Louisiana, the Mid-Continent, Michigan/Illinois, the Permian Basin, and south Texas.
Breitburn Energy Partners Lp is an independent oil and gas master limited partnership focused on the exploitation, development and production of oil and gas properties in the United States.
Like Breitburn Energy Partners, Linn Energy also filed for Chapter 11 protection in May of this year, and waiting for cancellation of shares. Breitburn was pressured by the SEC to form an equity committee and assign some value to shares.
According to a Linn Energy filing with the bankruptcy court on October 7, there is a material definitive agreement stipulating that all existing equity interests of the company will be extinguished without recovery. Chapter 11 can be a painful restructuring where total assets claimed by the company amount to over $7.5 bln against standing referenced debt over $7.67 bln.
In August they unexpectedly offered to exchange each outstanding unit of LINN Energy, LLC for one LinnCo share upon the terms and conditions of the Prospectus/Offer to Exchange dated April 26, 2016.
The purpose of the Exchange Offer was to permit holders of LINN units to maintain their economic interest in LINN through LinnCo, an entity that is taxed as a corporation rather than a partnership, which may allow LINN unitholders to avoid future allocations of taxable income and loss, including cancellation of debt income, that could result from future debt restructurings or other strategic transactions by LINN. Reportedly LinnCo now owns approximately 71% of LINN's issued and outstanding units. Linn had proved reserves of 4,488 billion cubic feet equivalent; and operated 19,294 gross productive wells.
The White Law Group continues to investigate the liability that brokerage firms and financial advisors may have for recommending high risk MLPs, like LINN Energy and Breitburn Energy to their clients. Brokerage firms that recommend energy investments are required to perform adequate due diligence on the investments to ensure a reasonable likelihood of success, and to evaluate whether the investments are suitable in light of their client's age, net worth, investment experience, risk tolerance, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.
If you suffered losses investing in LINN Energy or Breitburn Energy Partners and would like to discuss your litigation options, please call The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.