NEW YORK (Reuters) – When Cubic Energy Inc’s bankruptcy plan took effect on March 1, shareholders of the Dallas-based coal and oil company were destroyed. 25 million at the company’s peak – through a private equity-style unit called Wells Fargo Energy Capital. The No. 3 U.S. ’ worth of exposure to the battling energy industry through regular loans that are souring. However the case of Cubic Energy demonstrates Wells Fargo went further into dangerous areas than other banking institutions, and could face a reckoning now. 100 a barrel in 2014. The price drop has squeezed energy companies, smaller ones especially, and managed to get harder for them to repay loans.
Some of Wells Fargo’s most volatile publicity sits within Wells Fargo Energy Capital, a device that sought excess fat returns through equity investments and high-risk loans to small companies like Cubic Energy, presuming the energy growth would last. 30 million in debt as of Nov. 30, relating to its reorganization plan. The lender received land and other property in Louisiana within the reorganization. What those Louisiana assets are worth today is anyone’s guess, said Jon Ross, who was simply Cubic’s vice leader of operations until it collapsed. “Valuations now are so crazy in the coal and oil industry,” he said.
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42 billion energy loan reserve. Nonetheless it is increasing concerns for …