March 8, 2012 / 2:43 PM / 6 years ago

Cano Petroleum, units file for bankruptcy

(Reuters) - Cano Petroleum Inc CANO.PK said on Thursday it filed for bankruptcy along with its units, as continued losses and loan defaults prevented the Texas-based oil and gas producer from raising capital.

Cano said it would ask the Bankruptcy Court for the Northern District of Texas, Dallas Division to approve a marketing process in which NBI Services Inc would be appointed as a “stalking horse” bidder.

A “stalking horse” is a bidder chosen by a bankrupt company from a pool of potential suitors to make the first bid for its assets, which is used as the base for a sales process.

In the absence of a higher bid, NBI would pay $47.5 million for the reorganized Cano and the amount would then be distributed to creditors, the company said.

The company said it would continue to manage its properties and operate its businesses while it seeks confirmation of its joint plan of reorganization.

Reporting by Jochelle Mendonca in Bangalore; Editing by Viraj Nair

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