U.S. Energy May File for Bankruptcy

U.S. Energy, which produces electricity and alternative energy in the U.K., said it will need about $21 million in September to meet operating and contractual obligations.

"The failure to obtain such funds is likely to result in USEY filing for protection in the U.S. under Chapter 11 of the Bankruptcy Code and its U.K. subsidiaries being forced to enter bankruptcy administration in the U.K.," the company said.

U.S. Energy is discussing options to restructuring its existing debt with lenders, including asset sales and access to $25 million in restricted cash reserves.

The company received a nonbinding letter of intent for the sale of its U.S. Energy Biogas Corp. subsidiary, but no definitive agreements have been reached.

Shares of U.S. Energy, which is delinquent in its regulatory filings, fell 5 cents, or 7.3 percent, to 64 cents in morning trading.