Wright Energy Corp., a tiny Newport Beach oil exploration company, said it has found an Orange County mortgage company willing to lend as much as $5.3 million to keep the company afloat.
The loan is an integral element of Wright's reorganization plan, which it filed with the U.S. Bankruptcy Court earlier this week.
Wright's two major creditors, Barclays Bank International Ltd. and Whittaker Corp., recently filed petitions asking the court to liquidate the company. Wright owes New York based-Barclays about $14.2 million and owes Whittaker, a Los Angeles conglomerate, about $10 million. Wright also owes an additional $2 million to other creditors.
"We'll fight the liquidation," said Barry Jacobs, Wright's attorney. "They are trying to short-circuit our attempts to reorganize."
Wright, which operates oil fields in Kentucky, is typical of many petroleum companies that sprang up during the domestic oil-drilling boom of the late 1970s and early 1980s. Many of these companies borrowed heavily to expand and have perished as oil prices have fallen.
Wright officials say the reorganization plan offers their company a chance to survive. At one point, Wright and Whittaker had discussed a merger that might have averted bankruptcy for Wright, but that effort failed and Wright is suing Whittaker over the collapse of the deal.
Jacobs said the mortgage company, which he would not name, would lend Wright the money only if it is repaid before Wright's other creditors.
An attorney for Barclays said Friday that he had not yet seen Wright's reorganization plan.
"I think if Barclays (officials) felt the plan was attractive and reasonable, they would go for it, but if they felt it was going to jeopardize their position for getting their money out, they would oppose it," Iain Macdonald, a San Francisco attorney representing Barclays, said in a telephone interview Friday.
Macdonald said Barclays and Whittaker decided to ask for Wright's liquidation under Chapter 7 of the U.S. Bankruptcy Code because they thought Wright had missed a court deadline for filing its reorganization plan. A court hearing on the motion for liquidation has been set for April 10 in U.S. Bankruptcy Court in Santa Ana.
Wright's Jacobs said that if the court approves the plan, the company would pay off its creditors with proceeds from sales of oil recovered from its Kentucky oil fields.