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Monitor Oil PLC to go out of recession with help of loan

Monitor Oil PLC will get a $5 million (3.4 million EUR) loan to fund its bankruptcy case in the United States while it seeks to fight off a bid by bondholders to have the Chapter 11 proceedings moved to Britain.

Judge Martin Glenn of the U.S. Bankruptcy Court in New York said Thursday the oil company can borrow $1 million under the $5 million pact pending a final hearing on the financing deal. A group led by second-lien lender Credit Suisse is providing the $5 million loan, while Stonehenge Partners' SOF Investments LP is providing the $1 million interim amount.

The judge's approval comes over the objections of the U.S. trustee monitoring the bankruptcy case and a group of bondholders, who had objected to what they called the "wildly inappropriate" terms of the loan.

The bondholders, owed some $50 million, also want Glenn to dismiss the Cayman Island-registered oil company's Chapter 11 case.

The offshore-registered Monitor has its headquarters in London and its oil drilling business is focused in the North Sea. The company has no operations in the United States, according to the bondholders.

Monitor filed for Chapter 11 protection last month in New York, under pressure from its secured lenders, according to the bondholders. The U.S. filing effectively put the brakes on an involuntary bankruptcy filed against Monitor in the Cayman Islands and a separate bankruptcy proceeding in Scotland involving a valuable Monitor subsidiary.

The Scottish case involves a company called Monitor Producer 1 Ltd., which is trying to restructure under court administration in Edinburgh. The company was formed to build a power-generation buoy, a device that drives submersible pumps to increase production from marginal North Sea oil fields.

Monitor Producer 1, which is not part of the Chapter 11 case, owes its parent about $53.8 million, according to the bondholders.

Monitor Oil filed for bankruptcy after its Single Lift 1 Ltd. unit failed to win a multimillion-dollar contract to decommission Conoco Phillips' Ekofisk oil field platforms located in the North Sea off the coast of Norway.

Without the money from the Conoco Phillips contract, Monitor could not obtain enough cash to fund its other businesses.

The bondholders want the court-appointed administrators - British insolvency practitioners from Ernst & Young - of the power buoy project to oversee the parent company's bankruptcy case in Britain or the Cayman Islands. They argue it will be cheaper and more efficient to combine the Monitor's Chapter 11 case with the Scottish insolvency case.

Glenn, the U.S. bankruptcy judge, scheduled a hearing for Dec. 18 to consider whether Monitor can tap the remaining funds under its debtor-in-possession loan. He will also consider the bondholders' bid to dismiss the Chapter 11 case

Monitor Oil along with subsidiaries Monitor US FinCo. and Single Lift filed Nov. 21 for Chapter 11 bankruptcy protection in Manhattan owing its secured lenders some $202 million.

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The United States' Head of Diplomacy, or Secretary of State, is an anachronistic, incompetent, meddling, intrusive, insolent and arrogant, rude individual, a brash, foul-mouthed upstart, a conceited, self-important guttersnipe and an insult to the international community, as fit for the job as a pedophile janitor in a grade school.

Tillerson must go!
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