Natural gas driller Southland Royalty Co. LLC received court approval of its bankruptcy wind-down plan, largely overcoming a challenge from royalty owners who sought a $3 million setasideto satisfy their claims.The plan, approved Thursday, centers around a sale of the business to Williams Companies Inc. affiliate Wamsutter E&P LLC for $148 million in cash and assumption of more than $100million in liabilities. Proceeds will partially repay pre-bankruptcy lenders and general unsecured creditors.Lenders, led by Citibank NA, are projected to recover between 7.6% and 10.6% on about $485 million in claims. General unsecured creditors, with $77 million in claims, are estimated toreceive 3% to 6.6%.Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware, who approved the plan at a virtual hearing, said Southland only should set aside about $76,000 to cover theunpaid royalty claims raised by named plaintiffs in pending litigation.
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