Item 1.03 Bankruptcy or Receivership.
As previously disclosed, on November 18, 2019, Approach Resources Inc.
("Approach," the "Company" or "we") and all of its subsidiaries (the "Filing
Subsidiaries and, together with Approach, the "Debtors") filed voluntary
petitions (collectively, the "Bankruptcy Petitions") under chapter 11 ("Chapter
11"), of Title 11 of the U.S. Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Southern District of Texas (the "Court"), thereby
commencing the Chapter 11 cases captioned In re Approach Resources Inc., et al.,
Case No. 19-36444 (Bankr. S.D. Tex.) (the "Chapter 11 Cases").
As previously disclosed, on January 28, 2020, the Company filed a motion with
the Court seeking approval of the Company's Key Employee Incentive Plan (the
"KEIP"), to enact an incentive plan for certain senior level employees in
connection with the Company's plans for sales of all or substantially all of the
Debtors' assets pursuant to Section 363 of the Bankruptcy Code. On February 19,
2020, the Court entered an order approving such motion.
As previously disclosed, on September 3, 2020, the Company and certain of the
Filing Subsidiaries entered into an asset purchase agreement with Zarvona III-A,
L.P. ("Zarvona") for the sale of substantially all of the Debtors' assets to
Zarvona for a purchase price of $115.5 million (the "Zarvona Sale"), and the
Court entered an order approving such sale effective September 14, 2020.
On September 28, 2020, the Company filed a motion with the Court (the "Motion")
seeking approval of payments under the KEIP at Target metric levels, as
specified in the Motion, to certain senior level employees of the Company upon
the closing of the Zarvona Sale. The Compensation Committee of the Board of
Directors (the "Board") of the Company and the Board each approved such payments
to certain senior level employees of the Company under the KEIP as specified in
the Motion.
The Motion and information regarding the Chapter 11 Cases is available through
the Company's website under the Restructuring Information tab, which contains a
link to the claims agent's website, https://dm.epiq11.com/approachresources.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth above in Item 1.03 of this Report regarding the Motion
is incorporated herein by reference into this Item 5.02.
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