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CorEnergy Files For Chapter 11, Enters Restructuring Support Agreement

CorEnergy Infrastructure Trust, Inc. announced it has entered into a restructuring support agreement following its decision to file for Chapter 11 bankruptcy.

Posted February 26, 2024

Kansas City-based CorEnergy Infrastructure Trust, Inc. announced it has filed for Chapter 11 bankruptcy as part of an agreement with its noteholders to restructure the company’s debt.

CorEnergy Infrastructure Trust, Inc., a real estate investment trust, said it reached a restructuring support agreement with its holders that will reduce debt and restructure its balance sheet, according to a release. CorEnergy’s holders account for approximately 90 percent of CorEnergy’s 5.875 percent in unsecured convertible senior notes due in 2025.

Under the terms of the agreement, CorEnergy will cancel all outstanding common stock. Notes will be exchanged for cash, $45 million in new secured debt with a five-year term and a 12.0 percent coupon and approximately 89 percent of the equity in a reorganized CorEnergy. Holders of CorEnergy’s equity and securities that are convertible into preferred equity will receive the remaining approximately 11 percent of the equity of the reorganized CorEnergy. Additionally, general unsecured claims will also be paid in full.

CorEnergy listed assets of $14.5 million and debts of $118.4 million, according to the Chapter 11 filing in U.S. Bankruptcy Court for the Western District of Missouri. Convertible notes due in 2025 equal to more than $118.24 million.

The company says it aims to complete the restructuring process in the second quarter of 2024 as a real estate investment trust, according to the release.

“Restructuring our debt will help to right-size our capital structure for the smaller scale of the enterprise following the MoGas and Omega sale, building on our efforts to increase liquidity through a combination of asset sales and tariff increases,” chairman and CEO of CorEnergy, Dave Schulte said in the release.

In January, CorEnergy announced it had closed the sale of its MoGas and Omega pipeline systems to Spire Midstream, a subsidiary of Spire Inc., for $175 million in an all-cash transaction. The transaction repaid and canceled the Crimson Pipeline credit facility, for a total of $109 million. The transaction left Crimson Pipeline as the sole remaining operation of CorEnergy.