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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
MARCH 17, 1999
(DATE OF REPORT) (DATE OF EARLIEST EVENT REPORTED)
EXCO RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-9204 74-1492779
(COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.)
5735 PINELAND
SUITE 235
DALLAS, TEXAS 75231
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 368-2084
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 17, 1999, EXCO Resources, Inc., a Texas corporation ("EXCO"),
completed the acquisition of Rio Grande, Inc., a Delaware corporation ("RGI")
pursuant to a bankruptcy proceeding. RGI was a San Antonio based oil and
natural gas company.
On November 2, 1998, EXCO acquired from Comerica Bank-Texas ("Comerica") a
Promissory Note ("Note") dated January 15, 1997, which was executed by Rio
Grande, Inc. and Rio Grande Drilling Company as co-makers in favor of Comerica.
EXCO paid approximately $6.4 million for the purchase price of the Note with
available cash on hand. The Note, in the original face amount of $50,000,000,
had a principal amount outstanding of $13,127,666 and related accrued interest
payable of $486,227 on November 2, 1998. Repayment of the Note was secured by a
first lien deed of trust, mortgage and security interest in substantially all
of RGI's and certain of its subsidiaries' and/or affiliates' assets, primarily
oil and gas leasehold interests and tangible well equipment (the "Collateral
Properties"). The sum of the outstanding principal and accrued interest on the
Note was significantly in excess of what RGI believed to be the current market
value of the Collateral Properties. Pursuant to an agreement between Comerica
and EXCO relating to the purchase by EXCO of the Note, EXCO acquired all of
Comerica's rights pursuant to the Note and the related Loan Agreement and
associated collateral documents. In connection with EXCO's purchase of the
Note, Comerica agreed to dismiss litigation it had initiated against RGI and
its directors seeking to collect amounts due under the Note.
Contemporaneously with EXCO's purchase of the Note, RGI, EXCO and Koch
Exploration Company ("Koch"), the holder of RGI's preferred stock, entered into
a Voting Agreement (the "Agreement") providing for a Financial Restructuring
(as defined in the Agreement) with regards to the Note, the Preferred Stock
Interests (as defined in the Agreement) of Koch and other claims against RGI.
The proposed Financial Restructuring provided that RGI and certain of its
subsidiaries and/or affiliates would commence cases under Chapter 11 of the
Bankruptcy Code and would seek to obtain court approval of a joint plan of
reorganization pursuant to the terms of the Financial Restructuring (the
"Proposed Plan"). The description of the Agreement set forth herein is
expressly qualified by and made subject to the terms of the Agreement, a copy
of which was previously filed. The Proposed Plan provided for distributions to
claimants in a manner substantially similar to the Plan (as hereinafter
defined) ultimately confirmed by the bankruptcy court.
In accordance with the Agreement, RGI filed a voluntary petition on November
12, 1998 under Chapter 11 of the Bankruptcy Act, Case No. 98-55619-C in the
United States Bankruptcy Court, Western District of Texas, San Antonio
Division, Judge Leif M. Clark presiding (the "Court"). RGI, as Debtor in
Possession, operated and managed its affairs during the bankruptcy proceedings.
The case was consolidated and jointly administered with the Chapter 11 cases
simultaneously filed by the following affiliates of RGI (collectively with RGI,
the "RGI Group"): Rio Grande Drilling Company ("Drilling"), a Texas corporation
and wholly-owned subsidiary of Rio Grande, Inc.; Rio Grande Desert Oil Company
("Desert"), a Nevada corporation and wholly-owned subsidiary of Drilling; Rio
Grande Offshore, Ltd. ("Offshore"), a Texas limited partnership, the sole
general partner of which was Drilling and the sole limited partner of which was
Desert; and Rio Grande GulfMex, Ltd.("Gulfmex"), a Texas limited partnership,
the sole general partner of which was Offshore, which owns an 80% interest in
Gulfmex. The case was styled "In re: Rio Grande, Inc., Rio Grande Drilling
Company, Rio Grande Desert Oil Company, Rio Grande Offshore, Ltd., and Rio
Grande Gulfmex, Ltd.," (Case Nos. 98-55619-C, 98-55620-C, 98-55621-K,
98-55622-C and 98-55623-C, respectively, jointly administered (under Case No.
98-55619-C)).
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On January 25, 1999, that certain First Amended Disclosure Statement to First
Amended Joint Plan of Reorganization, dated January 25, 1999, was filed and
approved by the Court. That certain First Amended Joint Chapter 11 Plan of
Reorganization, dated January 25, 1999 as modified March 4, 1999, (the "Plan"),
filed herewith as Exhibit 2.1, was filed with the Court and confirmed pursuant
to that certain Confirmation Order entered March 5, 1999 (the "Confirmation
Order"), filed herewith as Exhibit 2.2. The Findings of Fact and Conclusions of
Law accompanying the Confirmation Order (which set forth, among other things,
the March 4, 1999 modifications to the Plan) are filed herewith as Exhibit 2.3.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Plan.
The Plan provided for certain class ("Class") definitions for each group of
creditors or parties that may have had claims against a member of the RGI
Group. The Class definitions were:
Class 1 The Allowed Secured Claim in respect of the Note.
Class 2 Any Allowed Secured Claims against any of the RGI Group other
than the Allowed Secured Claim in Class 1.
Class 3 Any Allowed Claims against any of the RGI Group that are
unsecured claims entitled to priority pursuant to the
Bankruptcy Code, other than Priority Claims specified in
sections 507(a)(1), 507(a)(2) and 507(a)(8) of the Bankruptcy
Code.
Class 4 Any Allowed, Nonpriority Unsecured Claims against any of the
RGI Group not classified elsewhere including any Deficiency
Claim under the Note.
Class 5 Allowed Preferred Stock Interests in RGI, and all rights to
dividends and any other rights associated therewith, held by
Koch Exploration Company.
Class 6 Allowed Limited Partnership Interests in Gulfmex.
Class 7 Allowed RGI Common Stock interests, and any options, warrants,
or other rights or Claims in respect of such Common Stock,
and all other equity interests of the RGI Group, excluding
those equity interests classified in Classes 5 and 6.
Class 8 Intercompany claims.
The Plan provided for treatment of the Classes in the following manner:
Administrative and Priority Tax Claims were unclassified under the Bankruptcy
Code and were paid in full. Class 1 claims were allowed in full and were
satisfied by delivery of all the Reorganized RGI Common Stock. Classes 2, 3 and
4 claims were paid in full and the legal rights of the claimants were
unaltered. Class 5 claims were canceled in exchange for a 30-day option to
acquire up to 24.5% of the working interest owned by the RGI Group in the
Righthand Creek Properties for $698,250. The Class 6 legal interests remain
outstanding, unaltered. The Class 7 and 8 claims were extinguished in full.
The Plan provided for its implementation through (1) merging of Drilling,
Offshore and Desert with and into RGI, (2) paying cash to unclassified claims
and classes 2, 3 and 4, (3) restating and amending the Reorganized RGI charter
to comply with section 1123(a)(6) of the Bankruptcy Code by, inter alia,
providing for restrictions on issuance of non-voting equity securities and (4)
canceling all shares of Common Stock and Preferred Stock and reissuing
Reorganized RGI Common Stock to Class 1.
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The Plan also provided for limitation of liability on Exculpated Persons with
respect to good faith attempts to implement and consummate the Plan.
The Plan provided for the assumption of generally all executory contracts and
unexpired leases but for the rejection of any pre-petition employment
agreements effective upon the last day of the calendar month in which
substantial confirmation of the Plan occurred.
The Plan was confirmed by the Court on March 4, 1999 and consummation of the
Plan began on March 16, 1999. Substantial consummation of the Plan occurred on
March 17, 1999, with the completion of a series of mergers which effected the
merger of Desert, Offshore and Drilling into RGI pursuant to the terms of the
Plan.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
As permitted by Form 8-K, the required financial statements
in respect of Rio Grande, Inc. will be filed by amendment to
this Form 8-K no later than May 31, 1999.
(b) Pro Forma Financial Information.
As permitted by Form 8-K, the required pro forma financial
information in respect of Rio Grande, Inc. will be filed by
amendment to this Form 8-K no later than May 31, 1999.
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(c) Exhibits.
Number Document
2.1 First Amended Joint Chapter 11 Plan of
Reorganization of Rio Grande, Inc., Rio Grande
Drilling Company, Rio Grande Desert Oil Company, Rio
Grande Offshore, Ltd., and Rio Grande GulfMex, Ltd.,
dated January 25, 1999 and modified March 4, 1999,
previously filed as an exhibit to RGI's Form 8-K/A
filed March 23, 1999 and incorporated by reference
herein.
2.2 Confirmation Order for the Plan of Reorganization,
dated March 4, 1999, previously filed as an exhibit
to RGI's Form 8-K/A filed March 23, 1999 and
incorporated by reference herein.
2.3 Findings of Fact and Conclusions of Law regarding
Confirmation Order (which set forth the March 4,
1999 modifications to the Plan), previously filed as
an exhibit to RGI's Form 8-K/A filed March 23, 1999
and incorporated by reference herein.
99.1 Voting Agreement dated October 30, 1998 between Rio
Grande, Inc., Rio Grande Drilling Company, Rio
Grande Offshore, Ltd., Rio Grande Desert Oil Company
and Rio Grande GulfMex, Ltd. and EXCO Resources,
Inc. previously filed as an Exhibit to RGI's Form
8-K dated November 12, 1998 and incorporated by
reference herein.
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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.
EXCO RESOURCES, INC.
By: /s/ T.W. EUBANK
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T.W. Eubank, President
Dated: April 1, 1999
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