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Banking, Stocks

“Legacy Reserves to file for bankruptcy…”

” Legacy Reserves Inc.’s stock LGCY, -16.33% plunged 42% in active premarket trade Tuesday, after the oil and gas company said it expects to file for bankruptcy, in an effort to facilitate the implementation of a restructuring agreement with its lenders. Trading volume topped 3 million shares ahead of the open. The agreement will provide for a de-leveraging of its capital structure by over $900 million, including an equity capital infusion of at least $200 million; and payment in full of its other secured creditors, tax and other claimants, trade creditors and employees…”

https://www.marketwatch.com/story/legacy-reserves-to-file-for-bankruptcy-as-oil-and-gas-price-downturn-prompts-financial-restructuring-2019-06-11

If you’re in penny stocks and you see a article like this, this is a red flag. I at the very least will be avoiding this stock because they filed for bankruptcy. There was some leeway with this stock because a agreement was not reached until the 14. As I will show in the article below.

“Legacy Reserves Inc. Reaches Global Restructuring Agreement With RBL Lenders, Second Lien Lenders And Noteholder Group”

“… The proposed financial restructuring will provide the Company with go-forward liquidity and a right-sized pro forma capital structure while minimizing operational disruptions by ensuring trade creditors will be paid in full… The Company expects to file voluntary petitions for reorganization in the United States Bankruptcy Court for the Southern District of Texas (the “Court”) to facilitate the financial restructuring and implement the Plan contemplated by the Global RSA…”

https://finance.yahoo.com/news/legacy-reserves-inc-reaches-global-105500260.html  

You can also see today that the stock is doing poorly. I wouldn’t expect a rally on this stock. If It does happen I’ll be extremely surprised.

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