Storm Cat Energy Corporation Announces Default Under Subordinated Convertible Notes, Provides Update of Credit Facility and Engages Parkman Whaling LLC and Alvarez & Marsal

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[{"type":"text","content":"\n\n\n\nDENVER and CALGARY, Alberta, Oct. 31 /CNW/ -- Storm Cat Energy\nCorporation (Amex: SCU; TSX: SME) today reported that it failed to make its\nrequired quarterly interest payment when due on September 30, 2008, and such\nfailure has continued for a period of 30 days, with respect to its Series A\nand Series B Subordinated Convertible Notes each due March 31, 2012. The\nfailure of Storm Cat to make the required quarterly interest payment prior to\nthe expiration of such 30 day grace period constitutes an "Event of Default"\nunder the terms of each of the respective Note Purchase Agreements.\n\n\nIn connection with Storm Cat's previously reported and continuing\ndefaults under its Credit Agreement, its Lenders notified the noteholders that\npursuant to the terms of the Note Purchase Agreements and the Subordination\nand Intercreditor Agreement previously entered into by the noteholders, that\nthe Lenders were enforcing their rights (1) to prohibit Storm Cat from making\nany payments to the noteholders, and (2) to require that the noteholders\nstandstill and not accelerate any amounts due under the Notes upon an Event of\nDefault or seek other enforcement or redemption actions otherwise permitted\nunder the Note Purchase Agreements. Additionally, as a result of the Event of\nDefault, the rate of interest on the outstanding principal amount of the Notes\nas well as any overdue interest will increase from 9 1/4% to 12.0% per annum.\n\n\nStorm Cat has been in discussions with its Lenders since mid-August in\norder to seek a waiver or forbearance of the defaults under the Credit\nAgreement, to amend the Credit Agreement or otherwise restructure the Company\nand seek a liquidity event. Although Storm Cat intends to pursue in good\nfaith efforts to renegotiate or restructure the terms of the Credit Agreement,\nthere can be no assurance that these efforts will ultimately be successful. In\naddition, any restructuring plan ultimately agreed upon by Storm Cat and its\nLenders may involve implementation through a bankruptcy filing by Storm Cat\nand/or certain of its subsidiaries. In the event that Storm Cat and its\nLenders fail to agree on the terms of a consensual restructuring of the\nobligations under the Credit Agreement, the Lenders may attempt to effect an\nacceleration of the obligations under the Credit Agreement. In...

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