UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 16, 2011
BARON ENERGY, INC.
(Exact name of registrant as specified in its charter)
NEVADA 333-146627 26-0582528
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
392 W. Mill Street,
New Braunfels, TX 78130
(Address of principal executive offices) (Zip Code)
(830) 608-0300
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL
OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT.
On March 16, 2011, Baron Energy, Inc. (the "Company," "we," "us," "our") was
served with a copy of a petition filed by a subordinated secured lender,
BaseLine Capital, Inc. ("Baseline"), in the District Court of Midland, Texas,
238th Judicial District naming us and our senior secured lender, Newton Energy,
Inc. ("Newton"), as defendants (the "Petition"). The Petition alleges we
breached our loan agreement, promissory note in the original principal amount of
$500,000 (the "Note"), and subordination agreement (collectively, the "Loan
Documents") with Baseline, and that Newton breached its subordination agreement
with Baseline. We are the successor-in-interest to the Loan Documents pursuant
to our merger with the original debtor, Permian Legend Petroleum LP, in February
2010. Newton is the successor-in-interest to the subordination agreement
pursuant to an assignment from the original senior creditor, American State
Bank, in August 2010.
The maturity date of the Note was August 1, 2010. Per the Petition, the amount
due and payable under the Note as of the date of the Petition is $299,813. The
Note is secured by a lien on our rights in thirteen oil and gas properties. The
Loan documents prohibit Baseline, without Newton's consent which may not be
unreasonably withheld, from commencing any action against us to recover the debt
we owe Baseline under the Loan Documents prior to repayment in full of the debt
we owe Newton. Baseline sent us a letter, dated January 5, 2011, notifying us
and Newton of its belief that an event of default under the Loan Documents has
occurred based on a recent sale of our rights in several oil and gas properties
other than the thirteen securing our obligations under the Note and the Loan
Documents.
Under the Petition, Baseline has demanded a judgment in its favor for its actual
damages and attorneys' fees and court costs, together with any pre-judgment and
post-judgment interest it may be allowed to by law. We intend to respond to the
Petition and defend the action commenced by Baseline. In addition, we will also
explore a possible settlement with Baseline. There can be no assurance that we
will be successful in defending the Petition or negotiating a settlement with
Baseline.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
BARON ENERGY, INC.
Date: March 22, 2011 By: /s/ Ronnie L. Steinocher
-----------------------------------------
Name: Ronnie L. Steinocher
Title: President and Chief Executive Officer
