The oil-and-gas Master Limited Partnership (MLP) Linn Energy (NASDAQ: LINE) plunged its investors further into financial peril with a 2016 Chapter 11 Bankruptcy filing, while a Bankruptcy Court this month ruled that Linn Energy's secured lenders are not entitled to payment of post-petition default interest.
Linn Energy previously cut distributions for LINE in 2015 after seeing shares drop by over 50% since June 2014, and 70% thereafter—Citi, for instance, had slashed LINE's target price from $23.50 to $11.50—spelling trouble for customers heavily invested or overconcentrated in the risky oil-and-gas MLP.
To illustrate, ex-Wells Fargo Advisors reps Charles Frieda and Charles Lynch of the firm's Irvine branch compiled 31 total disclosures in a 15-month period, including a handful of complaints from retirees alleging that Frieda and Lynch engaged in unsuitable overconcentration in risky and speculative oil and gas holdings.
Linn Energy's biggest underwriters for a 2015 public offering included Raymond James & Associates, Inc. (2,136,000 units); and Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, JP Morgan Securities LLC, Merrill Lynch, Morgan Stanley & Co, and RBC Capital Markets, each of which purchased $1,720,000 Linn Energy (LINE) units—all this after the dramatic 2014 price drops.
Among the risk factors disclosed in LINE's filing at the time were volatility considerations. The document cautioned that, "the securities market has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities."
In other words, the price of oil had fluctuated and fallen, leaving exploratory, speculative, or risky securities like LINE in the lurch.
After bankruptcy, Linn Energy restructured its business and, since March 2017, Linn Energy IncA has traded over-the-counter as OTC symbol LNGG.
In its November 2017 quarterly filing with the SEC, Linn Energy conceded in its Risk Factors section that, "We have limited control over the operations of Roan, which could adversely affect our business," a reference to Roan Resources LLC, a company formed jointly with Citizen Energy II, LLC to manage activities in Oklahoma that greatly affect Linn Energy's performance, such as oil well drilling rigs. Other related entities cited in the November SEC filing were Linn Energy Holdings, LLC; Linn Operating LLC; Linn Midstream, LLC; Bridge Energy LLC; and Washakie Exam Opportunities, LLC.
The new-era Linn Energy has been selling assets, including sales of assets named "Jonah," "Salt Creek," "California," "South Texas," "Permian - Acreage," "Washakie," and "Williston." Linn Energy IncA's active sales processes, according to the 2017 Q3 report, include the Permian, Altamont Bluebell, Drunkards Wash, and Oklahoma Waterfloods assets. The company is also actively engaged in a share repurchase program.
If you have invested in Linn Energy's Master Limited Partnership (NASDAQ: LINE), in any oil-and-gas MLP, or have suffered losses as a result of overconcentration in such unsuitable investments or recommendations, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.