GMX Resources, Endeavor Pipeline Inc. and Diamond Blue Drilling Co. Seek Protection Through Chapter 11 Bankruptcy Filings ($GMXR)

Today's press release from GMXR about the bankruptcy filing:

OKLAHOMA CITY, Okla., April 1, 2013 (GLOBE NEWSWIRE) -- GMX RESOURCES INC., (GMXR); an oil and gas exploration and production company with assets in the Williston Basin, East Texas Basin and Denver Julesburg ("DJ") Basin announced today that it has filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court (the "Bankruptcy Court") for the Western District of Oklahoma. In connection with this petition, GMXR is pursuing an asset purchase agreement with holders of its Senior Secured Notes due 2017 who own a majority of these secured notes (collectively referred to below as the "Principal Senior Secured Noteholders") to acquire substantially all of the Company's operating assets and undeveloped acreage. The Company's joint venture, Endeavor Gathering LLC, in which the Company owns a 60% membership interest, is not included in the filing.

Upon finalizing the contemplated asset purchase agreement with the Principal Senior Secured Noteholders, the sale will then be subject to a public auction and receipt of competing, and potentially higher and better offers, pursuant to procedures to be approved by the Bankruptcy Court.

The Company has obtained a commitment for debtor-in-possession (DIP) financing from the Principal Senior Secured Noteholders, which will provide up to $50 million of additional financing to fund the Company's operating expenses. Upon approval by the Bankruptcy Court, the new financing and cash generated from the Company's ongoing operations will be used to support its business and the Company's efforts to negotiate and implement a sale of its assets.

This was perfectly expected based on the missed interest payment a month ago. It looks as though only the first liens will have a recovery. Will be interesting to see where the equity trades.