Houston-based rig operator Paragon Offshore has been denied its request to exit Chapter 11 bankruptcy.
In an unusual move for such proceedings, a judge in US Bankruptcy Court in the District of Delaware rejected Paragon’s plan on the grounds that it required the removal of too much cash from the company in these rocky economic times.
Paragon had filed for Chapter 11 in February when it had about $2.6bn in long-term debts.
The firm has the option to come back to the court with a different restructuring plan.
As with many companies in the offshore industry, Paragon was hit by the plunge in oil prices, which saw its clients cut back drastically their drilling operations.