On March 31, Swift Energy Co. (OTC: SFYWQ) said that its plan of reorganization was approved by the United States Bankruptcy Court for the District of Delaware, paving the way for the company to emerge from bankruptcy.

Swift filed for Chapter 11 protection after entering into a restructuring support agreement (RSA) with an ad hoc group of its senior noteholders.

The parties agreed to the plan, which provided for a conversion of the company’s senior unsecured notes to equity, payment or satisfaction in full of most of the company’s secured and unsecured creditors.

Under the plan there will be distribution of equity and warrants after the reorganization to the existing shareholders.

At the time the plan was filed, agreements had not been reached on the treatment of the $75 million debtor in possession (DIP) loan provided by certain unsecured noteholders and the treatment of the company’s reserve-based loan.

Agreements have since been reached with respect to both loans.

The Swift DIP lenders agreed to convert the entirety of their $75 million DIP loan to equity and the company’s bank group has agreed to provide a $320 million reserve-based exit loan that will refinance the existing loan.

When the plan is implemented, the pre-petition senior noteholders, contract rejection claim holders and DIP participants will hold 96% of the new Swift common stock.

Existing shareholders will hold 4% of the new stock and will receive warrants for an additional 30%.

The company will have reduced its unsecured debt by about $905 million. Houston-based Swift said that it is scheduled to emerge from bankruptcy by April 15.

Law firm Jones Day, investment bank Lazard, and financial adviser Alvarez & Marsal are assisting Swift.