Pembina Pipeline Corporation announced that Pembina and certain of its wholly-owned affiliates have entered into a settlement agreement (the "Settlement Agreement") with Ruby Pipeline LLC ("Ruby").
The terms of the Settlement Agreement provide for, upon approval of the United States Bankruptcy Court for the District of Delaware and the payment of all amounts contemplated by such agreement, the release of Pembina from any causes of action arising in connection with, among other things, prepetition distributions and the bankruptcy case. In consideration, the Settlement Agreement provides for the payment from Pembina to Ruby of US$102 million (the "Settlement Payment"). The United States Bankruptcy Court for the District of Delaware is expected to consider the terms of the Settlement Agreement at a hearing for Ruby's Chapter 11 plan ("the Plan") proposed for January 23, 2023.
The Plan provides for the potential sale by auction of Ruby's assets with a distribution of the value of the Ruby estate to its creditors following confirmation of the Plan. In the event the Plan is approved as currently contemplated, Pembina's affiliates retain all rights to recovery under the 2026 Subordinated Notes (the "Sub Notes") as a creditor, subject to the terms of the Plan and the Sub Notes, after accounting for any rights of subordination in favour of other creditors.