Linn Energy (LINE) says that its unit holders have until April 25 to exchange their units for LinnCo shares. According to SeekingAlpha.com, the Texas-based company is making the deal to avoid CODI (cancellation of debt income).
As it stands, Linn Energy has suspended its distribution and is making interest payments on its unsecured debt just in time before its 30-day grace period to make the payments ends in order to avoid a default. According to Nasdaq.com, the energy player paid interest of $60M on senior debt. At some point, Linn Energy may have to file for bankruptcy.
This month, Zach Investment Research downgraded Linn Energy shares from a buy rating to a hold one. It sent investors a research report with this new information. Stifel Nicolaus (SF) also lowered shares of the oil and gas company from a hold rating to a sell one in February. In March, Robert Baird lowered its target price on Linn Energy shares and established a neutral rating for the company in its research note. In December, Barclays (BARC) reaffirmed its hold rating of the shares. Ladenburg Thalmann downgraded Linn Energy from neutral to a sell rating and Citigroup (C) did the same in its research note.
Meantime, other big investors changed their holdings of Linn Energy, with Morgan Stanley (MS) enhancing its stakes to 1,569,627 shares. First Trust Advisers LP also increased its shares, as did First Premier Bank.
If you are an investor seeking to file a claim against Linn Energy or if you think you may have grounds for a case, please contact our oil and gas fraud law firm today. Shepherd Smith Edwards and Kantas, LTD LLP is here to help investors recoup their losses. Your first consultation with our Texas securities law firm is a free, no obligation session.
Linn Energy Really Wants You To Do That Exchange, SeekingAlpha, April 20, 2016