The fall in partnership earnings combined with its significant outstanding debt resulted in Memorial Production Partners’ high leverage. Until recently, MEMP used internally generated cash flows for distribution payments and borrowed from the capital market to fund its organic projects and acquisitions. That resulted in a significant rise in its leverage over recent quarters and a fall in its liquidity position.
MEMP’s earnings improved in the recent quarter, driven by a slight recovery in commodity prices. But prior periods’ shortfalls were high and couldn’t be covered without a restructuring under Chapter 11 of the United States Bankruptcy Code.
View more information: https://marketrealist.com/2016/12/led-memorial-production-partners-bankruptcy/