Soreide Law is investigating possible legal claims on behalf of investors who have suffered losses by purchasing California Resources Corporation (OTC: CRCQQ) because of their securities broker or financial advisor. Notably, California Resources Corporation filed for Chapter 11 bankruptcy protection and is in the process of restructuring. Here’s more on the company’s issues and some things to keep in mind if you suffered losses.
Who Is California Resources Corporation?
Evidently, California Resources Corporation is a publicly traded oil and natural gas exploration and production company. Apparently, it has been California’s largest oil and natural gas producer to date. The company purports to operate a “world-class resources base” within California. In that capacity, it provides infrastructure to gather, process and market the product. Evidently, more than 3,000 contractors and employees work for the company.
California Resources Corporation Files For Bankruptcy
Apparently, the company’s business strategy of “maximizing shareholder returns by accelerating production growth profitably” has not been profitable. In fact, on July 15, the company announced that it entered into a restructuring support agreement (RSA) with 84% of its holders of 2017 term loans and of 51% of the holders of 2016 term loans. Also, the company’s Elk Hills joint venture partner, Ares Management LP, joined in.
In announcing the arrangement, California Resources Corporation President and Chief Executive Officer, Todd A. Stevens, stressed that “today’s unprecedented market conditions, including oversupply and reduced demand due to Covid-19, require that we further reduce our debt through a Chapter 11 process.”
Apparently, the Chapter 11 bankruptcy filing in the United States Bankruptcy Court for the Southern District of Texas was necessary for implementing the RSA. The company claims that the Chapter 11 process and RSA will allow it to operate while commodity prices are depressed while creating a solid financial foundation to “enhance future value creation.”
Also, Ares acquiesced to contributing equities in Elk Hills Power LLC – a venture between California Resources Corporation and one of Ares’ portfolio companies. Supposedly, upon emergence it is planning to exchange joint venture interests for new California Resources Corporation notes and equity in the reorganized company pursuant to the RSA’s terms.
California Resources Corporation Amends Restructuring Support Agreement
On July 24, California Resources Corporation amended the RSA, this time gaining 85% of support from term loans due 2017 and 68% from holders of unsecured and deficiency debt claims. Notably, the company claimed that it will be able to rid itself of more than $5,000,000,000 in debt and mezzanine equity interest, among other things. Apparently, the company closed $1,100,000,000 in debtor-in-possession financing to keep it afloat through the bankruptcy process.
As of July 15, 2020, CRCQQ sold for $0.23 per share. Notably, its 52-week high was $16.36 and 52-week low was $0.21. The company’s value took a nosedive around the time that Covid-19 came along. In fact, CRCQQ closed at $7.59 per share on February 21, so shares have fallen in value by about 97% since then.
Financial Advisor Sales Practice Violations
It is possible that a financial advisor provided you with bad advice about CRCQQ. Specifically, some financial advisors could have failed to take into account your risk tolerance, objectives and financial needs. Others might have misrepresented CRCQQ’s risks to get you to purchase the product. Also, a financial advisor could have breached a fiduciary duty to you by placing their financial interests ahead of yours or through acting negligently.
Losses By Investing In CRCQQ Because Of Your Financial Advisor?
Suffered losses because of investing in California Resources Corporation (OTC: CRCQQ) from your securities broker or financial advisor? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of securities brokers and financial advisors.