LONDON (Alliance News) - Troubled oil and gas company Sefton Resources PLC saw its shares plummet on Thursday after Sefton said that the court in its US bankruptcy proceedings have re-scheduled the date of the hearing to November from October and that it cannot sell its US assets before the hearing under US law.
Sefton shares were down 21% to 0.0550 pence per share late Thursday.
The company is currently embroiled in a legal battle with its former executive chairman, Jim Ellerton, which it has said is trying "force the company into bankruptcy proceedings".
Ellerton lodged the original legal claim against the company, two directors and one former director in May, claiming damages related to his resignation from the company's board, the termination of his consulting contract, and a deal with Hawker Energy.
That was followed by Ellerton filing an involuntary petition under Chapter 7 of the US bankruptcy code to try to force the company into bankruptcy.
Sefton is fighting the former chairman's claims, arguing he and his associates have a "lack of understanding" and made the claims in "bad faith".
The hearing was originally scheduled to take place on October 1 and 2.
However, Sefton said Thursday that the hearing will now be on November 12 after the court made the ruling to "provide the parties with additional time for discovery".
"The court also confirmed that the company in the interim may not engage in the extraordinary disposition of assets beyond the ordinary course of business, in accordance with the U.S. bankruptcy laws, which means the company cannot dispose of its legacy oil and gas assets located in Kansas, USA," said Sefton.
Sefton is trying to sell its assets in Kansas, but the company has already faced difficulties after a deal with the proposed buyer for its TEG MidContinent Inc and TEG Transmission LLC units in Kansas pulled out of a deal in August. The buyer made a new offer, but Sefton said it was not in line with its aims and so the deal was terminated.
"Whilst the company continues to seek potential buyers, the difficulties in the market due to the current depressed oil price make this difficult in the short term, and as a result this embargo on disposal until the hearing is not expected to have any practical impact," said Sefton.
The news will not be welcomed by the company or its shareholders as it adds to Sefton's woes. The company also is dealing with a requisition from a group of shareholders, including former Interim Chairman Daniel Levi, for an extraordinary general meeting to remove the entire board apart from Jossy Rachmantio.
Last week, Chief Financial Officer Raylene Whitford resigned "for personal reasons". Whitford was one of the directors that the shareholder group wanted removed.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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