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Upstream: Tax: GMX Resources Inc.

GMX Resources Inc. (GMXR) is a publicly-traded, independent oil and gas exploration and production company based in Oklahoma City, Oklahoma that developed acreage in Williston Basin, Denver Julesburg Basin, Haynesville/Bossier and Cotton Valley Sand formations.  On April 1, 2013, GMXR filed a joint Chapter 11 bankruptcy petition, after an illiquidity situation.

Opportune’s Managing Partner was retained as the Chief Restructuring Officer (CRO) after GMXR filed for bankruptcy, and the goal was to maximize and retain the value of all of the assets of the bankruptcy estate for the benefit of creditors (and possibly, shareholders).  Opportune’s tax team was engaged to assist with the restructuring and to preserve and maximize the tax attributes.

Our team of experienced tax consultants performed calculations under proposed various financial and legal structures to identify the highest and best use of the tax attributes, and then determine the proper steps to achieve the desired results.  Opportune also helped facilitate agreement on the rehabilitation plan between all of the bankruptcy estate stakeholders.  To preserve all the tax loss carryovers, the creditors converted GMXR to a privately held company under a new name.  It continues to operate the assets in the form of a limited partnership that is partly owned by the old corporation and partly by the Senior Lenders.

The plan of reorganization was approved on January 22, 2014, and GMXR changed its name to Thunderbird Resources Equity Inc. (Thunderbird), operating through Thunderbird Resources L.P. (TRLP). Thunderbird continues to develop the oil and gas assets in the Williston, Denver Julesburg, and East Texas Basin, and it is considering other tax-sensitive investments, in light of its very favorable tax loss carry-forward position.

Opportune provides comprehensive tax solutions for businesses that require strategic or tactical tax support. Our seasoned professionals combine sound, innovative and adaptable ideas with the pragmatism that comes from having been on both sides of the desk — in both corporate and consulting roles. We develop creative solutions that drive performance while mitigating enterprise risk. For more information, click here.

Lynn Loden

Managing DirectorOpportune LLP