Apollo, Fidelity Hit as Judge Cuts Stake in Bankrupt Oil Driller

An almost 70% majority of oil driller Mesquite Energy Inc. belongs to its unsecured creditors, while only about 30% should go to its bankruptcy lenders including Apollo Commodities Management LP and Fidelity Management & Research Company, a Texas bankruptcy court ruled.

US Bankruptcy Judge Marvin Isgur’s Thursday ruling settles ownership of the company formerly known as Sanchez Energy Corp., and hands a loss to the Apollo Global Management LLC subsidiary and several other secured lenders that lent the company millions of dollars.

The opinion addresses one of the biggest issues that has hovered over the case despite court approval of ...