FOR IMMEDIATE RELEASE: Israels & Neuman, PLC Launches Investigation into Energy XXI (Bermuda), Ltd. Bankruptcy Filing and Stock Losses
Israels & Neuman, PLC, is a securities fraud law firm with offices in Denver, Seattle, Portland, Chicago, and Ann Arbor. The firm hereby announces that it has launched an independent investigation into the bankruptcy filing of Energy XXI Ltd. (EXXI) a/k/a Energy XXI (Bermuda) Limited and investor losses associated therewith.
Energy XXI Ltd., is a publicly traded crude oil producer and drilling company that focuses its operations in the shallow waters of the Gulf of Mexico. Its headquarters are located in Houston, Texas, but the company is incorporated in Bermuda. According to the Wall Street Journal, Energy XXI Ltd. filed for chapter 11 bankruptcy on April 14, 2016.
The chapter 11 bankruptcy has the potential to create a total loss for company shareholders, but, would likely be a great deal for junior bond holders. Under the proposed chapter 11 plan, the junior bondholders, which include Franklin Advisors, Oaktree Capital Management, and Penn Capital Management, would exchange their interest in the bankrupt company for 100% of the outstanding stock in a newly formed company that would effectively assume the operations of Energy XXI Ltd. The current shareholders would not receive any compensation and would likely suffer a total loss of their investment.
As of August 30, 2016, the current stock price of Energy XXI Ltd. has settled at roughly $0.03 per share. Energy XXI Ltd. stock prices have been on a steady decline since 2013, having been valued roughly at $30.00 per share in 2013, $3.00 per share near the end of 2014, to losing nearly all of its value today. Energy XXI Ltd. is considered a micro-cap stock due to the fact that its current market capitalization is less than $300 million. In fact, as of August 30, 2016, Energy XXI Ltd.’s market capitalization has fallen to only $3.36 million.
Even if the proposed chapter 11 plan is not confirmed, it is highly unlikely that any investors in Energy XXI Ltd. will receive any meaningful recovery from the bankruptcy proceeding, due to what is known as the “Absolute Priority Rule,” which prohibits distributions to equity investors, prior to full repayment of creditors of higher “priority,” which includes general unsecured creditors. Further, Energy XXI Ltd. court filings do not dispute the fact that there is no chance of recovery for investors.
An investment in Energy XXI Ltd. was extremely risky, particularly in high concentrations. If you purchased stock in Energy XXI Ltd. on the advice of a financial advisor or stockbroker, you may be able to bring a claim for your losses through FINRA arbitration. This is because financial advisors have a duty to disclose the risks associated with these types of investments and must ensure that their client’s portfolios are adequately diversified, so that the investor’s portfolio is not completely wiped out in the event of a downturn.
Aaron Israels and David Neuman are experienced securities arbitration attorneys and have represented investors in recovering their investments in micro-cap oil stocks, including some who invested in companies very similar Energy XXI Ltd. Israels & Neuman, PLC represents arbitration clients in all 50 states, including those located in Texas, Denver, Seattle, Portland, Chicago, and Ann Arbor. Our primary practice is representing victims of investment fraud.
Our office handles all of our arbitration cases on a contingent fee basis, meaning you do not pay unless we recover money for you.
Have You Lost Money with Energy XXI Ltd. (EXXI) a/k/a Energy XXI (Bermuda) Limited, or in Micro-cap Oil Stocks?
CONTACT ISRAELS & NEUMAN, PLC FOR A FREE CASE EVALUATION
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Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.