Filing Details

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

CUSIP No. 13057Q305

SCHEDULE 13D

Page 4 of 10

1	NAME OF REPORTING PERSON   Steven A. Tananbaum
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a)  ☐ (b)  ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS   OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)	☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER   0
	8	SHARED VOTING POWER   19,914,491 (1)
	9	SOLE DISPOSITIVE POWER   0
	10	SHARED DISPOSITIVE POWER   19,914,491

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   19,914,491
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   23.9% (2)
14	TYPE OF REPORTING PERSON   HC, IN

This statement on Schedule 13D (the “Schedule 13D”) relates to the common shares, $0.01 par value per share (the “Common Shares”), of California Resources Corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 27200 Tourney Road, Suite 200, Santa Clarita, California.

(a) This statement is filed by:

(i) GoldenTree Asset Management LP, a Delaware limited partnership registered as an investment adviser with the U.S. Securities and Exchange Commission (the “Advisor”), with respect to Common Shares of the Issuer held in the respective accounts of the Funds and Managed Accounts (each as defined below);

(ii) GoldenTree Asset Management LLC, a Delaware limited liability company (the “General Partner”), with respect to Common Shares of the Issuer held in the respective accounts of the Funds and Managed Accounts;

(iii) Mr. Steven A. Tananbaum (“Mr. Tananbaum”) with respect to Common Shares of the Issuer held in the respective accounts of the Funds and Managed Accounts; and

(iv) GoldenTree Distressed Master Fund III Ltd, a Cayman Islands corporation (“DMF III”), with respect to Common Shares of the Issuer held by DMF III.

The Advisor, the General Partner, Mr. Tananbaum and DMF III are hereinafter sometimes collectively referred to as the “Reporting Persons.” Any disclosures herein with respect to persons other than the Reporting Persons are made on information and belief after making inquiry to the appropriate party.

(b) The address of the principal business office of each of the Reporting Persons is 300 Park Avenue, 21st Floor, New York, N.Y. 10022.

(c) The principal business of the Advisor is to serve as the investment manager or adviser to DMF III as well as certain other funds and managed accounts of the Advisor (collectively, the “Funds and Managed Accounts”). By virtue of its position as the investment manager or adviser to the Funds and Managed Accounts, the Advisor may be deemed to have voting and investment power over the Common Shares of the Issuer directly held by the Funds and Managed Accounts. The principal business of the General Partner is to serve as the general partner of the Advisor. In addition, as the general partner of the Advisor, the General Partner may be deemed to have voting and investment power over the Common Shares of the Issuer directly held by the Funds and Managed Accounts. The principal business of Mr. Tananbaum is to serve as the managing member of the General Partner. As the managing member of the General Partner, Mr. Tananbaum may be deemed to have voting and investment power over the Common Shares of the Issuer directly held by the Funds and Managed Accounts. The principal business of DMF III is acquiring, holding and disposing of interests in various companies for investment purposes.

(d) None of the Reporting Persons nor any of the Funds and Managed Accounts has during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) None of the Reporting Persons nor any of the Funds and Managed Accounts has during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) The Citizenship of the Reporting Persons is as follows:

(i) Advisor – Delaware;

(ii) General Partner – Delaware;

(iii) Mr. Tananbaum – United States of America;

(iv) DMF III – Cayman Islands

The Reporting Persons have agreed to jointly file this Schedule 13D. A Joint Filing Agreement is filed herewith.

The disclosure in Item 4 below is incorporated herein by reference.

On July 15, 2020, the Issuer and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) in order to effectuate the Joint Chapter 11 Plan of Reorganization of California Resources Corporation et al., dated July 24, 2020 (as amended, supplemented or modified, the “Plan”), a copy of which is filed as Exhibit 2.1 to the Issuer’s Form 8-A12B filed with the SEC on October 27, 2020 (the “Form A12B”) . On October 13, 2020, the Bankruptcy Court entered an order confirming the Plan (the “Confirmation Order”), a copy of which was filed as Exhibit 99.1 to the Form 8-A12B. On October 27, 2020 (the Effective Date”), the Company satisfied the conditions specified in the Confirmation Order and the Plan became effective.

Pursuant to the Plan, the Issuer effected a restructuring (the “Restructuring”), pursuant to which, among other things, holders (the “Holders”) of claims (as defined in section 101(5) of the Bankruptcy Code, the “Claims”) or interests (as defined in section 101(16) of the Bankruptcy Code, the “Interests”) in the Issuer and certain of its subsidiaries were permitted to surrender such Claims and Interests for a mixture of newly issued Common Shares and newly issued Warrants. As Holders, the Funds and Managed Accounts surrendered their Claims and Interests for 11,214,008 Common Shares and 428,097 Warrants, collectively. In addition, The Funds and Managed Accounts purchased 6,141,023 Common Shares in a rights offering conducted as part of the Restructuring, and received 2,083,889 Common Shares and 47,474 Warrants in consideration for a backstop fee paid in connection with the rights offering. The following table sets forth the Common Shares and Warrants received by the Funds and Managed Accounts pursuant to the Restructuring.

Warrants

Each Warrant distributed as part of the Restructuring will entitle its holder to subscribe for one Common Share at an exercise price of US$36.01 per Common Share. Each Warrant will be exercisable at any time, at the sole discretion of the holder, during a period of four years, beginning on the Effective Date.

The disclosure in Item 3 above and Item 6 below is incorporated herein by reference.

The Reporting Persons acquired the Common Shares of the Issuer reported in this Schedule 13D for the accounts of the Funds and Managed Accounts for investment purposes.

The Reporting Persons have and may from time to time in the future communicate their views to other shareholders, management, and the board of directors of the Issuer regarding various aspects of the Issuer’s governance, business and management.

The Reporting Persons intend to monitor and review their investments in the Issuer on a continuing basis. Depending on various factors, including, without limitation, the Issuer’s financial position and strategic direction, actions taken by the board of directors, price levels of the Common Shares, other investment opportunities available to the Reporting Persons, market conditions and general economic and industry conditions, the Reporting Persons may take such actions with respect to their investments in the Issuer as they deem appropriate. These actions may include, without limitation: (i) acquiring additional Common Shares and/or other equity, debt, notes, other securities,

elected to sell pursuant to such underwritten shelf takedown or Demand Registration, were able to sell at least 80% of the Registrable Securities requested to be included therein at the time thereof or within 30 days thereafter.

At any time following the Effective Date, or if the Issuer has previously filed a Form S-3 Shelf Registration Statement, beginning 180 days after the Effective Date, the Required Holders may request registration of all or any portion of the Registrable Securities beneficially owned by such Required Holders on Form S-1 or, if available, on Form S-3 (each, a “Demand Registration”). The Issuer is not required to effect a Demand Registration if (i) the Issuer effected a Demand Registration within 180 days preceding the date of a Demand Registration Notice (as defined in the Registration Rights Agreement) and such Required Holders were able to register and sell all of the Registrable Securities requested to be included in such registration either at the time or registration or within 30 days thereafter, (ii) such Demand Registration is not expected to yield aggregate gross proceeds of at least $50 million, (iii) the Registrable Securities requested to be registered are already covered by an existing and effective Registration Statement (as defined in the Registration Rights Agreement) that may be utilized for the offer and sale of these Registrable Securities, or (iv) the number of Demand Registration requests have exceeded three in a 12-month period. If a Demand Registration is an underwritten public offering, the number of Registrable Securities to be included in such Demand Registration will be subject to customary underwriter cutbacks under the Registration Rights Agreement.

In the event the Issuer proposes to file a registration statement or conduct a shelf takedown with respect to a public offering of the Common Shares  (subject to certain exceptions, a “Piggyback Registration”), the Issuer must notify all holders of Registrable Securities of its intention to effect such Piggyback Registration and include in such Piggyback Registration all Registrable Securities requested to be included therein, subject to customary underwriter cutbacks under the Registration Rights Agreements.

If reasonably requested by the Issuer and the managing underwriters in the event of any underwritten public offering, each holder of Registrable Securities agrees to execute a customary lock-up agreement, which will provide for restrictions on transferring the Issuer’s capital stock as specified in the Registration Rights Agreement. Additionally, in connection with any underwritten public offering and upon the reasonable request of the managing underwriters, the Issuer will agree to be subject to customary lock-up provisions and will use reasonable best efforts to cause its executive officers and directors to enter into customary lock-up agreements for such offering.

The Registration Rights Agreement includes customary indemnification provisions.

On November 5, 2020, the Advisor, on behalf of the Funds and Managed Accounts, requested that the Issuer file with the SEC a Shelf Registration Statement covering the resale of all of the Common Shares held by the Funds and Managed Accounts.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, the form of which is attached hereto as Exhibit 99.2 and incorporated by reference herein.