- 13 -
its equipment and rigs. On January 28, 1985, CDC entered into a
settlement agreement with Dresser Industries, Inc. (Dresser), one
of CDC' principal rig fabricators. Pursuant to the settlement
agreement, CDC and the bank group agreed to release their claims
and security interests in specific equipment associated with
uncompleted drilling rigs and to return the equipment to Dresser.
In exchange, Dresser agreed to release its security interest in
equipment that it had supplied to CDC and that had been
incorporated into CDC's drilling rigs. In addition, Dresser
agreed to release CDC from all claims by Dresser against CDC's
rigs.
During May 1985, CDC sold two drilling rigs to Superior
Equipment and Supply Co. for $1,450,000 and $1,500,000 and
transferred the sales proceeds to its creditors to reduce their
claims. These rigs were surplus to CDC's needs. It is customary
for drilling contractors to sell surplus rigs.
CDC's Bankruptcy Proceeding
On July 12, 1984, Crocker National Bank and TOS, trade
creditors of CDC, filed an involuntary petition under chapter 11
of the Bankruptcy Code against CDC. CDC converted the case into
a voluntary chapter 11 proceeding (bankruptcy proceeding).
On May 30, 1986, CDC filed an amended plan of reorganization
(amended plan) and an amended disclosure statement with the U.S.
Bankruptcy Court for the Western District of Oklahoma (the
bankruptcy court). As a fallback provision, section 6.12 of the
amended plan required that, if at the end of 5 years from the
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011