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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 1, 2000
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Date of Report (Date of earliest event reported)
COSTILLA ENERGY, INC.
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(Exact name of registrant as specified in its character)
Delaware 0-21411 75-2658940
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(State or other (Commission File Number) (IRS Employer
jurisdiction) Identification No.)
400 West Illinois, Suite 1000
Midland, Texas 79701
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(Address of principal executive offices)
(915) 683-3902
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Debtor's Plan of Reorganization (Liquidation), Restated to Reflect All
Amendments and Modifications (the "Chapter 11 Plan") of Costilla Energy, Inc.
(the "Company") in its bankruptcy proceeding styled In Re Costilla Energy, Inc.,
Case No. 99-70653 in the United States Bankruptcy Court for the Western District
of Texas, Midland Division, became effective on October 1, 2000 (the "Effective
Date"). A copy of the Chapter 11 Plan is attached hereto as Exhibit 99.1. The
Bankruptcy Court approved the Chapter 11 Plan by its Order Confirming Debtor's
Plan of Reorganization (Liquidation), as Restated to Reflect All Amendments and
Modifications entered on September 15, 2000, which became final on September 25,
2000.
Substantially all of the oil and gas assets of the Company were sold on
June 15, 2000. Accordingly, the material features of the Chapter 11 Plan relate
to the distribution of the proceeds from that sale, the creation of a
liquidating trust, and the cancellation of all of the equity interests of the
Company. With respect to the distribution of the sale proceeds, the estimated
recovery for the various classes of claims under the Chapter 11 Plan as set
forth in the Disclosure Statement with respect to Debtor's Plan of
Reorganization (Liquidation), as Amended (the "Disclosure Statement"), are as
follows (assuming net proceeds available for distribution of approximately
$116,000,000 as provided in the Disclosure Statement and other assumptions
provided therein): secured claims, 100%; administrative and priority claims,
100%; administrative convenience unsecured claims, 100%; general unsecured
claims including the Company's 10 1/4% Senior Notes due 2006, 44%; and equity
interests, 0. The amount available for distribution is subject to adjustment
related to post-confirmation liquidation expenses and activities.
The Chapter 11 Plan creates the Costilla Liquidating Trust, and by
operation of the confirmation order, the Trust takes possession and title to all
of the Debtor's property. A plan trustee has been appointed as provided in the
confirmation order and has the power and authority to complete the liquidation
of the remaining assets of the Company, including without limitation, the
prosecution of claims, objections, preferential transfer claims and other
lawsuits. The plan trustee is further authorized to take any action on behalf of
the Company that would otherwise require the approval of shareholders, directors
or officers of the Company without obtaining such approval. The Chapter 11 Plan
provides that the officers and directors of the Company have no further duties
or responsibilities after the Effective Date, and all of the officers and
directors of the Company resigned prior to the Effective Date. The Chapter 11
Plan also provides for the creation of a separate directors' and officers'
litigation trust with a separate trustee to investigate and pursue, if
appropriate, any claims that the Company may have against its former officers
and directors.
All of the outstanding equity interests of the Company, including the
Company's common stock and preferred stock and any options or other rights
related thereto, were cancelled pursuant to the terms of the Chapter 11 Plan as
of the Effective Date. Holders of equity interests are not entitled to any
distributions under the Chapter 11 Plan, unless all of the creditors are paid in
full, with interest, and all of the costs and expenses of the trusts have been
paid. Any such distribution would be made to the shareholders of the Company as
of the Effective Date in the order of the rights of such shareholders (i.e.,
first, to the preferred shareholders, and then, to the common shareholders).
There were 50,000 shares of the Company's preferred stock and 14,101,580 shares
of the Company's common stock outstanding on the Effective Date. The Company
believes that it is very unlikely that any distributions will be made to the
holders of equity interests of the Company.
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The following is a statement of assets and liabilities (identified by
type and class under the Chapter 11 Plan) based on unaudited financial
information as of June 30, 2000 as presented in the Disclosure Statement:
STATEMENT OF ASSETS
(in thousands)
<TABLE>
<CAPTION>
Preliminary
Balance Sheet
June 30, 2000 % Plan
(unaudited) Recovery Liquidation
<S> <C> <C> <C>
Cash and cash equivalents $114,884 100% $114,884
Accounts Receivable-Trade, net 582 40% 233
Accounts Receivable-Oil & Gas Sales -- 0% --
Prepaids 370 0% --
Total Current Assets 115,836 115,117
Oil & Gas Properties, net -- 0% --
Other Property & Equipment, net 1,800 10% 180
Gas Balancing Receivable -- 0% --
Other Assets, net 12,580 0% --
Title Defects Escrow 2,020 32% 646
Total Assets $132,236 $115,943
Net Proceeds Available for Distribution $115,943
</TABLE>
ALLOWABLE CLAIMS OF SECURED,
ADMINISTRATIVE, PRIORITY AND UNSECURED CLAIMANTS
(in thousands)
<TABLE>
<CAPTION>
Allowable
Claims
<S> <C>
Secured Creditor Claims:
Class 1: Banker's Trust Revolver $ 845
Class 2: Banker's Trust Hedging Obligation 19,462
Class 3: Dawson 525
Class 4: Other Secured Claims 749
Non-default interest at 6-30-00 1,020
Default interest at 6-30-00 655
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Subtotal $ 23,256
</TABLE>
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<TABLE>
<S> <C>
Administrative & Priority Claims:
Trust Professional Fees $ 1,800
Chapter 11 Professional Fees 1,200
Transaction Fee on Sale 1,250
Post-Petition Creditors 2,500
General and Administrative 1,200
Priority Tax Claims -0-
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Subtotal $ 7,950
Unsecured Claims:
Class 5: Allowed Priority Non-Tax Claims $ -0-
Class 6: Administrative Convenience Claims 354
Class 7: General Unsecured including Bonds 189,346
Class 8: Disallowed Claims, etc. 15,601
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Subtotal $ 205,301
Class 9: Equity $ -0-
</TABLE>
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Debtor's Plan of Reorganization (Liquidation),
Restated to Reflect all Amendments and Modifications
99.2 Order Confirming Debtor's Plan of Reorganization
(Liquidation), as Restated to Reflect all Amendments
and Modifications
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COSTILLA ENERGY, INC.
Dated: October 12, 2000 By: /s/ Bobby W. Page
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Bobby W. Page, Liquidating Trustee
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
99.1 Debtor's Plan of Reorganization (Liquidation), Restated to Reflect all
Amendments and Modifications
99.2 Order Confirming Debtor's Plan of Reorganization (Liquidation), as
Restated to Reflect all Amendments and Modifications
</TABLE>
