Energy Workouts & Reorganizations
Jackson Walker has considerable experience guiding our clients through the challenges specifically presented by workouts and bankruptcy proceedings in the energy industry. Our team of Bankruptcy, Restructuring & Recovery attorneys has represented debtors, secured creditors, creditors’ committees, unsecured creditors, interest owners and shareholders in energy cases. Working with our Energy attorneys, we provide our clients with effective strategies designed to maximize the potential for economic recovery.
We help energy company creditors deal with a variety of issues that accompany energy bankruptcy proceedings, including the management of commodity contracts (including energy contracts, financial transactions and fuel supply contracts), the termination and liquidation of forward contracts and swap agreements, the defense and settlement of claims, lien disputes, avoidance actions, use of cash collateral, plan treatment and more. We have also defended against the positions taken by bankrupt debtors on issues of industry-wide significance, including the right to enforce the provisions of master netting agreements.
In addition to representing clients in workouts and bankruptcies, we develop proactive strategies that incorporate lessons learned in bankruptcy cases to help mitigate future risks through careful structuring and documenting of transactions. We also have experience helping clients reduce their exposure to bankrupt trading counterparties and draft energy contracts that provide maximum protection in the event of a bankruptcy.
Jackson Walker attorneys have skillfully represented debtors as co-counsel in some of the largest energy bankruptcy cases filed in the country. We have successfully represented secured creditors in protecting their claims and rights in energy bankruptcy cases, including cases involving debt restructuring, §363 collateral sales with payment of the debt, and debt for equity exchanges. Our attorneys have also represented creditor’s committees, unsecured creditors, working interest owners (operating and non-operating), royalty owners, and midstream parties in complex Chapter 11 energy cases.
- McDermott: Represented McDermott International, Inc. and 225 of its subsidiaries and affiliates, including 107 foreign domiciled entities, in their prepackaged Chapter 11 cases in the U.S. Bankruptcy Court of the Southern District of Texas. McDermott is a premier, global upstream and downstream engineering, procurement, construction, and installation company and employs over 42,000 individuals across 54 countries and six continents. McDermott’s prepackaged Chapter 11 cases were confirmed in less than 60 days that will equitize nearly all of McDermott’s funded debt, eliminating over $4.6 billion of debt, and an auction process to sell McDermott’s Lummus technology business supported by a “stalking horse” bid with a base purchase price of $2.725 billion.
- Sanchez Energy: Represented Houston based driller Sanchez Energy Corporation and its affiliates in its Chapter 11 case in the Southern District of Texas. Sanchez Energy is currently using the Chapter 11 process to restructure over $1.5 billion in funded debt obligations in the face of a historic collapse of commodity prices.
- Sheridan Production Company: Served as co-counsel to the Fund I Debtors in their record setting Chapter 11 cases where the pre-packaged Plan was confirmed a little more than 24 hours after the petition date. Under the applicable Covid-19 related protocol in place at that time, counsel and witnesses appeared at the confirmation hearing via video conference.
- Jones Energy: Served as co-counsel and conflicts counsel to the Debtors, an Austin, Texas-based independent oil and gas company engaged in the exploration, development, production, and acquisition of oil and gas properties in the Anadarko Basin in Oklahoma and Texas. The pre-packaged Chapter 11 plan was confirmed in less than two months.
- Parker Drilling: Served as co-counsel and conflicts counsel to the Debtors, a Houston, Texas based provider of drilling services and rental tools to the global E&P market. The pre-packaged Chapter 11 plan was confirmed in less than four months. We also assisted with post-confirmation matters, including claim objections.
- Gastar Exploration: Served as co-counsel and conflicts counsel to the Debtors in this pre-packaged Chapter 11 filing. Jackson Walker assisted litigation efforts with respect to a contested first day hearing, and the plan is currently set for confirmation–only 50 days from the filing date. The Debtors have a funded debt of approximately $446 million.
- Westmoreland Coal: Served as co-counsel and conflicts counsel to the Debtors. Assisted with a partial 363 sale of certain assets of one of the Debtors. The Debtors are obligors on a principal amount of prepetition funded indebtedness totaling approximately $1.076 billion.
- Linn Energy: Served as co-counsel and conflicts counsel for the Debtors; we assisted with a contested confirmation hearing that resulted in the confirmation of the Debtors’ Chapter 11 plan that restructured approximately $9 billion in funded debt. As conflicts counsel, Jackson Walker also assisted with post-confirmation matters, including with respect to hundreds of claim objections, significantly reducing the pool of general unsecured claims, yielding a higher distribution for valid claims.
- Light Tower Rentals: Represented oil field services company in the successful prosecution of a “straddle” pre-packaged reorganization, resulting in a confirmed 100% pay plan only 30 days after petition date.
- Midstates Petroleum: Represented E&P company and affiliate in a successful Chapter 11 proceeding concerning in excess of $3 billion in assets and liabilities, including through deploying key litigation strategies related to confirmation, resulting in confirmation of a plan five months after the petition date.
- HRD: Represented a petroleum wax company in a litigious Chapter 11 proceeding involving numerous objections from major creditor and competitor. Obtained confirmation of Chapter 11 plan and successful denial of major creditor’s request to dismiss case or appoint a trustee.
Secured Creditor Representation
- Represented lead, agent, and/or participant banks in syndicated secured credit facilities in energy company Chapter 11 cases in Texas, Delaware, and New York, including C&J Energy, Chaparral Energy, North American Petroleum, Osyka Permian, Penn Virginia, and Stone Energy.
- Represented first lien bank group member in the Sabine Oil & Gas case (SDNY) owed approximately $90m.
- Represented first lien creditor in Crossfoot Energy (NDTX) bankruptcy case.
- Represented bank group members in the CalDive (DE) bankruptcy case.
- Represented bank group member in the Samson Resources (DE) bankruptcy case.
- Represented prospective DIP Lender in WBH Energy (WDTX) bankruptcy case.
- Represented aircraft financier in Magnum Hunter Resources Corp (DE) bankruptcy case.
- Represented member of first lien bank group in Knight Energy workout.
- Represented first lien lender in workout and paydown of eight-figure loan in the Miller Energy (Alaska) bankruptcy case.
- Represented depository bank and credit card issuer in Hercules Offshore (DE) bankruptcy case.
- Represented a secured lender in Energy XXI workout.
- Represented secured lender in Pro Oilfield Services workout.
- Represented secured lender in Postrock Energy Services workout.
- Represented secured lender in Craig Energy workout prior to bankruptcy case filed in Denver, Colorado.
- Represented secured lender in Rex Energy workout.
Unsecured Creditor Representation
- Represented retail energy providers in Chapter 11 cases.
- Represented seismic licensors in exploration and production Chapter 11 cases.
Creditor’s Committee Representation
- EXCO Resources—Acted as co-counsel for the Official Committee of Unsecured Creditors, where we provided in-depth and specialized lien review and analysis with respect to alleged mortgages on oil and gas leases throughout the U.S. As a result of our lien analysis, the Committee successfully negotiated a proposed plan distribution up from the 0% estimated upon filing to 18%.
- Energy Future Holdings—Acted as counsel for the largest unsecured trade creditor and co-chair of the Official Committee of Unsecured Creditors.
- Montco— Represented member of the Official Committee of Unsecured Creditors.
- Panaco—Represented co-chair of the Official Committee of Unsecured Creditors.
- Reichhold—Represented petrochemical company/trade creditor holding a multimillion-dollar unsecured claim against the debtor multinational paint manufacturer. Successfully achieved appointment to the Unsecured Creditors’ Committee (co-chair) and favorable recovery of claim (92%) through a negotiated asset sale.
- Consolidated Fuel Corporation—Represented the Official Committee of Unsecured Creditors with claims of $10 million, resulting in a plan that paid unsecured creditors in full, with interest.
- Represented shareholders in Chapter 11 case of Davis Petroleum.
Bankruptcy Trustee Representation
- Represented the trustee appointed in the Chapter 11 case of Trinity Energy.
- Represented Chapter 7 trustee coal mining and processing operation regarding the sale of assets and pursuit of accounts and fraudulent transfers.
- Represented Chapter 11 trustee in liquidation of oil and gas drilling service company.
- Represented Chapter 11 trustee of company with a million-acre oil and gas concession in Africa.
Distressed Asset Buyers and Sellers Representation
- Represented purchaser of all assets of a full service pipe-bending business.
- Represented purchaser of millions of dollars of oil field service equipment.
- Represented secured creditor in sale of oil and gas interests.
Landlord & Contract Counter Parties Representation
- Represented a variety of landlords in large and complex cases throughout the nation, including Energy Future Holdings and Seahawk Drilling.
- Represented midstream transportation company in Parallel Energy case.
- Represented landlord in Paragon Energy Case.
- Represented multiple seismic company licensors in various bankruptcy cases. Successfully opposed and negotiated acceptable terms for confirmation of proposed bankruptcy plans that would have negatively affected seismic licensor rights.
- Represented energy trading counterparties regarding the treatment of their forward contracts and swap agreements in Chapter 11 cases.