New Chapter 11 Bankruptcy - Cobalt International Energy Inc. ($CIE)

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Cobalt International Energy Inc.

  • 12/13/17 Recap: Houston-based publicly-traded ($CIE) deepwater exploration and production company operating in the U.S. Gulf of Mexico and offshore Angola and Gabon in West Africa has filed for bankruptcy. The company blames "a failed sale of Cobalt’s Angolan assets and the related litigation, the prolonged downturn in the exploration and production industry, and nearly $3.0 billion of funded indebtedness" for its filing. The company seeks a sale in bankruptcy. Other than the failed 2016 Angolan transaction, this story is pretty similar to other E&P bankruptcies we've seen in the past. Upshot: offshore exploration is expensive and with oil in the high 50s (a relatively high number), the economics aren't there to support the capital structure. 
  • Jurisdiction: S.D. of Texas (Judge Isgur)
  • Capital Structure: $500mm '21 first lien notes (Wilmington Trust NA), $934.7mm '23 second lien notes (Wilmington Trust NA), $619.2mm '19 2.625% unsecured notes (Wells Fargo Bank NA), 3.125% $786.9mm '24 unsecured notes (Wells Fargo Bank NA)
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Marc Kieselstein, Chad Husnick, Brad Weiland, Laura Krucks, Gabor Balassa, Stacy Pepper) & (local) Zach A. Clement PLLC (Zach Clement)
    • Investment Banker: Houlihan Lokey Capital
    • Claims Agent: KCC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Group of First Lien Notes
      • Legal: Weil Gotshal & Manges LLP (Matt Barr)
    • Ad Hoc Group of Second Lien Notes
      • Legal: Akin Gump Strauss Hauer & Feld LLP (James Savin)
    • First Lien Indenture
      • Legal: Wilmer Cutler Pickering Hale & Dorr LLP (Andrew Goldman)
    • Significant Equityholders: First Reserve GP XI Inc., The Carlyle Group, Riverstone Holdings LLC, Paulson & Co., Hotchkis and Wiley Capital Management LLC

New Chapter 11 Filing - Think Finance LLC

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Think Finance LLC

  • 10/23/17 Recap: Here, Fort Worth Texas-based Think Finance LLC, "a leading provider of financial technology services" (think online consumer lending) alleges that Victory Park Capital Advisors LLC, through an affiliate, prevented said affiliate from paying tens of millions of dollars for services Think rendered. This sparked a cascade of horribles as the company then didn't have money to make payroll, had to lay people off, and then, in turn, incurred severance payables. Insert adversary proceeding between the company and Victory Park Capital here. It doesn't help that the company is the defendant in a variety of other lawsuits that it needs funding for. Indeed, the Wall Street Journal highlights that the company is the subject of a variety of "predatory lending" suits. Sounds like a dramatic bankruptcy. Popping popcorn.
  • Jurisdiction: S.D. of Texas (Judge Hale)
  • Company Professionals:
    • Legal: Hunton & Williams LLP (Gregory Hesse, Tyler Brown, Jason Harbour)
    • Financial Advisor: Alvarez & Marsal LLC
    • Claims Agent: American Legal Claims Services LLC
  • Other Parties in Interest:
    • Victory Park Capital Advisors LLC
      • Legal: Kirkland & Ellis LLP (Ryan Blaine Bennett, Justin Bernbrock)

Updated 10/26/17

New Chapter 11 Filing - Castex Energy Partners LP

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Castex Energy Partners LP

  • 10/17/17 Recap: People have been saying that there is still more oil and gas distress to work its way through the system, particularly offshore-related companies. Well, here, Castex Energy Partners LP, a Houston-based onshore and offshore oil and natural gas exploration and production company located primarily on the coasts of Louisiana and Texas filed for bankruptcy to effectuate a restructuring support agreement with its major parties in interest. The company owns interests in approximately 375 wells (predominantly onshore); it also holds interests in certain seismic interests and specific lands. Like most other oil and gas E&P companies, Castex faced "intense financial pressure" due to the decrease in price of oil and gas and consequent decrease in demand for drilling. The company's EBITDA declined 70% from 2014 to 2016. Yes, you read that right: 70%. Of course, it didn't help that the company made an inopportune decision to invest heavily in offshore development in 2014, outlaying $259mm "in anticipation of future developmental drilling." Timing couldn't have been worse, it seems. Also, the company simply forgot to hedge, apparently; it "was mildly hedged and was exposed to [a massive nat gas] drop." Given all of that, the playbook is pretty un-extraordinary: strapped with a nice chunk of bank debt, the company attempted to make operational cuts to help sustain cash flow while simultaneously running a sales process through Evercore Partners Inc. That process failed. So, now, the company has $4mm of cash on hand and a $15mm DIP credit facility commitment from its prepetition lenders and a restructuring support agreement between it, Capital One Bank, Castex Energy Inc., and the RBL Lenders. The company plans to equitize certain prepetition lenders' debt and emerge from bankruptcy in Q1 of '18. 
  • Jurisdiction: S.D. of Texas (Judge Isgur)
  • Capital Structure: $400mm debt (Capital One Bank (USA) NA)    
  • Company Professionals:
    • Legal: Kelly Hart & Pitre LLP (Louis Phillips, Peter Kopfinger, Amelia Bueche, Patrick Shelby)
    • Restructuring Advisor: Alvarez & Marsal LLC (Ryan Omohundro)
    • Financial Advisor: Evercore Partners Inc.
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Castex Energy Inc.
      • Legal: Norton Rose Fulbright LLP (Kristian Gluck, Gregory Wilkes, Shivani Shah)
    • Prepetition & DIP Admin Agent: Capital One Bank (USA) NA & Consenting Lenders (Amegy Bank, Whitney Bank, IberiaBank, Frost Bank, Cross Ocean, Comerica Bank, Citibank NA, Bank of America Credit Products Inc., Capital One NA)
      • Legal: O'Melveny & Myers LLP (George Davis, Michael Lotito, Daniel Shamah) & (local) Porter Hedges LLP (John Higgins, Amy Geise)
      • Financial Advisor: RPA Advisors LLC
    • Riverstone V Castex 2005 Intermediate Holdings LLC
      • Legal: Vinson & Elkins LLP (Bradley Foxman, Paul Heath)

Updated 10/26/17

New Chapter 11 Filing - Seadrill Ltd.

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Seadrill Ltd.

  • 9/12/17 Recap: Cash rich offshore oil and gas extraction company with global reach filed a prearranged bankruptcy to effectuate a balance sheet restructuring because...well...it was over-levered AF. The company purports to have a deal with its major creditors with secured creditors kicking the can down the road, and $2.3b worth of unsecured bondholders and other unsecured claims converting into approximately 15% of the post-reorg equity (with participation rights in the new secured notes and equity noted below). The company will get $1.06b of new capital by combination of new secured notes ($860mm) and equity ($200mm). Holders of $NADL stock will get a big fat donut.  
  • Jurisdiction: S.D. of Texas (Judge David Jones)
  • Capital Structure: A. Lot. Of. Debt. Like $5.7mm of bank debt and $2.3mm of unsecured bonds.
First Day Declaration.

First Day Declaration.

 

  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (Jayme Sprayragen, Anup Sathy, Ross Kwasteniet, Adam Paul, Brian Schartz, Anna Rotman, Jeffrey Zeiger, Anthony Grossi, Spencer Winters) & (local) Jackson Walker LLP (Patricia Tomasco, Matthew Cavenaugh, Rachel Biblo Block)
    • Restructuring Advisor: Alvarez & Marsal LLC (Jeffrey Stegenga, Ed Mosley)
    • Financial Advisor: Houlihan Lokey (David Hilty, Gavin Kagan, Dimitar Voukadinov, Drew Talarico, David Wang, Brian Keenan, Varun Desai, Daniel McManus) & Morgan Stanley
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Conflicts Committee of Board of Directors of North Atlantic Drilling Limited and to the Conflicts Committee of the Board of Directors of Sevan Drilling Limited
      • Legal: Willkie Farr & Gallagher LLP (Jennifer Hardy, Andrew Mordkoff, Derek Osei-Bonsu)
      • Financial Advisor: Baker Tilly Virchow Krause LLP (Susan Seabury)
    • Conflicts Committee of Seadrill Partners LLC
      • Legal: Orrick Herrington & Sutcliffe LLP (Katherine Treistman, Raniero D'Aversa, Laura Metzger, Debra Felder)
    • New Money: Hemen Holding Ltd., Centerbridge Partners LP
      • Legal: Cadwalader Wickersham & Taft LLP (Greg Petrick, Yushan Ng, Nicholas Vislocky) & Fried Frank Harris Shriver & Jacobson LLP (Brad Scheler, Jennifer Rodburg, Andrew Minear) & (local) Dykema Cox Smith (Deborah Williamson, Patrick Huffstickler, Aaron Kaufman)
    • Consenting Lender Group
      • Legal: White & Case LLP (Scott Greissman, Philip Abelson, Andrew Katz) & (local) Andrews Kurth Kenyon LLP (Robin Russell, Timothy A. Davidson II, Joseph Rovira)
    • Aristeia Capital L.L.C., GLG Partners LP, Saba Capital Management LP and Whitebox Advisors LLC
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Philip Dublin, Ira Dizengoff, David Staber, Abid Qureshi, Sara Brauner)
    • ARCM Master Fund III, Ltd.
      • Legal: Paul, Weiss, Rifkind, Wharton & Garrison, LLP (Elizabeth McColm, Andrew Rosenberg, Catherine Goodall)
    • Indenture Trustee: Deutsche Bank Trust Company Americas
      • Legal: Morgan, Lewis & Bockius LLP (Chad Steward, Glenn Siegel, Crystal Axelrod, Rachel Jaffe Mauceri)
    • Daewoo Shipbuilding & Marine Engineering
      • Legal: Pachulski Stang Ziehl & Jones LLP (Shirley Cho, Bradford Sandler, Steven Golden)
    • Samsung Heavy Industries Co., Ltd.,
      • Legal: Hogan Lovells US LLP (Robin E. Keller, Ronald J. Silverman, Christopher R. Bryant, Michael Shane Johnson) & (local) 
    • Official Committee of Unsecured Creditors (Nordic Trustee AS, Deutsche Bank Trust Company Americas, Computershare Trust Company NA, Daewoo Shipbuilding & Marine Engineering Co. Ltd., Samsung Heavy Industries Co. Ltd., Pentagon Freight Services Inc., Louisiana Machinery Co. LLC)
      • Legal: Kramer Levin Naftalis & Frankel LLP (Thomas Moers Mayer, Douglas Mannal, Jennifer Sharret) & (local) Cole Schotz PC (Michael Warner, Benjamin Wallen)

Updated 10/5/17 12:03 pm CT

New Chapter 11 Filing - The Engy Group LLC

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The Engy Group LLC

  • 8/8/17 Recap: Houston-based energy-focused private equity shop has filed for bankruptcy. The pleadings are limited but it's safe to assume that this bankruptcy is a tack-on effect of the prior year+ bloodbath in oil and gas.
  • Jurisdiction: SD of Texas (Judge Isgur)
  • Company Professionals:
    • Legal: Diamond McCarthy LLP (Kyung Lee)

Updated 8/8/17

New Chapter 11 Filing - GenOn Energy Inc.

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GenOn Energy, Inc.

  • 6/14/17 Recap: NRG Energy Inc. ("$NRG") owned deregulated wholesale power generation corporation and operator of 32 power plants in 8 states (Mid-Atlantic & California) filed a bankruptcy case with a restructuring support agreement agreed to by NRG and holders of 90% of the funded debt. The plan for the restructuring is to delever the company by $1b with the holders of the unsecured senior notes obtaining equity in the reorganized entity from NRG (and the right to participation in rights offering for $900mm in exit financing). This is another in a line of recent power cases including Panda Temple Power, Homer City Generation LP, Illinois Power Generating Co., La Paloma Generating Company LLC. And it probably won't be the last. The company cited the following causes - in addition to its over-levered capital structure - for the bankruptcy filing: (i) flat demand for power over the past five years, (ii) excess capacity (in part due to insufficient power plant retirements), (iii) lower cost structure for competitors, and (iv) significantly depressed natural gas prices. "This combination has caused energy and capacity prices to fall. So has the Debtors' profitability as a result." In the mid-Atlantic, electricity cleared $100 per megawatt hour in early 2014 and now the price hovers around $30 per megawatt hour. And nat gas isn't predicted to recover to industry price highs at least until 2030. So, looks like the merger that created this combined mid-Atlantic/California entity and levered this sucker up to the sky was a bit ill-timed, hey? 
  • Jurisdiction: S.D. of Texas (Judge Jones)
  • Capital Structure: $ '18 RCF (NRG Energy Inc. & U.S. Bank NA), $691mm '17 7.875% Senior Notes & $649mm '18 9.50% Senior Notes & $490mm '20 9.875% Senior Notes (Wilmington Trust Company NA), $366mm '21 8.50% Senior Notes & $329mm '31 9.125% Senior Notes (Wilmington Savings Fund Socieity FSB)    
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, David Seligman, Steven Serajeddini, W. Benjamin Winger, Christopher Hayes, AnnElyse Scarlett Gibbons) & (local) Zack A. Clement PLLC (Zach Clement)
    • Financial Advisor: McKinsey Recovery & Transformation Services U.S., LLC (Kevin Carmody, Tanner MacDiarmid, Sam Jacobs)
    • Investment Banker: Rothschild & Co. (Todd Snyder)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Committee of GenOn Note and GAG Notes
      • Legal: Ropes & Gray LLP (Keith Woffard, Stephen Moeller-Sally, Marc Roitman, Meredith Parkinson) & (local) Porter Hedges LLP (John Higgins, Joshua Wolfshohl, Rachel Thompson)
    • Ad Hoc Steering Committee of GAG Notes
      • Legal: Quinn Emanuel Urquhart & Sullivan LLP (David Gerger, Emily Smith, Benjamin Firestone, Daniel Holzman)
    • NRG Energy Inc.
      • Legal: Baker Botts LLP (Emanuel Grillo, Ian Roberts, Christopher Newcomb)
    • Wilmington Trust Company
      • Legal: Covington & Burling LLP (Ronald Hewitt, Dianne Coffino)
    • Issuing Bank: Citibank NA
      • Legal: Latham & Watkins LLP (Richard Levy, David Hammerman)

Updated 7/11/17 6:47 pm CT

New Chapter 11 Filing - Vanguard Natural Resources

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Vanguard Natural Resources

  • 2/2/17 Recap: Houston-based oil and gas producer files chapter 11 pursuant to a restructuring support agreement that, if implemented, will permit the company to cut over $700mm of debt. The company has secured a $50mm DIP. 
  • Jurisdiction: SD of Texas
  • Capital Structure: $1.372b '18 L+250 RBL (Citibank N.A.), $76mm '20 7% second lien notes, $51'm '19 8.375% unsecured notes (Wilmington Trust), $382mm '20 7.875% unsecured notes (UMB Bank)    
  • Company Professionals:
    • Legal: Paul Hastings LLP (Chris Dickerson, James Grogan, Todd Schwartz, Alexander Bongartz, Brendan Gage)
    • Financial Advisor: Opportune LLP (Scott Anchin)
    • Investment Banker: Evercore Partners (Daniel Aronson, Marco Acerra)
    • Claims Agent: Prime Clerk (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Group of 2L noteholders (Fir Tree Inc., Wexford Capital LP, York Capital Management Global Advisors)
      • Legal: Morrison & Foerster LLP (Jonathan Levine, John Pintarelli, Daniel Harris) & (local) Jackson Walker LLP (Monica Blacker, Matthew Cavenaugh)
    • Ad Hoc Committee of Senior Noteholders & UMB Bank NA
      • Legal: Milbank (Dennis Dunne, Andrew LeBlanc, Samuel Khalil) & (local) Porter Hedges LLP (John Higgins, Eric English)
      • Investment Bank: PJT Partners Inc.
    • RBL Lender: Citibank NA
      • Legal: Weil (Stephen Karotkin, Joseph Smolinsky, Blaire Cahn, Christopher Lopez)
    • UMB Bank
      • Legal: Kelley Drye & Warren LLP (Eric Wilson, Benjamin Feder, T. Charlie Liu)
    • Wilmington Trust
      • Legal: Pryor Cashman LLP (Seth Lieberman, Patrick Sibley, Matthew Silverman) & (local) Cole Schotz PC (Michael Warner, Benjamin Wallen)
    • Independent Directors of the Board
      • Legal: Andrews Kurth Kenyon LLP (Robin Russell, Tad Davidson, Joseph Buoni)
    • Unsecured Noteholder & Preferred Unitholder: Panning Capital Management 
      • Legal: Munger Tolles & Olson LLP (Thomas Wolper, Seth Goldman) & (local) Norton Rose Fulbright US LLP (William Greendyke, Jason Boland, Bob Bruner, Louis Strubeck) 
    • Ad Hoc Equity Committee
      • Legal: Gardere Wynne Sewell LLP (John Melko, Sharon Beausoleil, Michael Riordan, Sean Wilson, Holland O'Neil)
    • Official Committee of Unsecured Creditors
      • Legal: Akin Gump (Charles Gibbs, Michael Stamer, Abid Qureshi, Meredith Lahaie, Kevin Zuzolo)
      • Financial Advisor: FTI Consulting

Updated 3/22/17

 

New Filing - Illinois Power Generating Company

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Illinois Power Generating Company

  • 12/9/16 Recap: Wholly-owned subsidiary of Dynegy Inc. files for Chapter 11 to effectuate a prepackaged plan of reorganization that has significant support from noteholders - just not enough support to avoid a filing. Top unsecured creditors include a who's who of recent restructuring favorites like Peabody Energy and Arch Coal.  
  • Jurisdiction: S.D. of Texas
  • Capital Structure: $825mm of total funded debt. $300mm '18 7% senior notes, $250mm '20 6.3% senior notes, $275mm '32 7.95% senior notes     
  • Company Professionals:
    • Legal: Latham & Watkins LLP (D.J. Baker, Caroline Reckler, Kim Posin, Josef Athanas, Jeffrey Mispagel) & (local) Andrews Kurth Kenyon LLP (Robin Russell, Timothy A. Davidson, Joseph Buoni, Ashley Harper)
    • Financial Advisor: Ducera Partners LLC (Derron Slonecker, Mark Davis, Adrian Reiter) & Waterloo Capital Management Inc. (Jeff Hunter)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Group of Consenting Noteholders (Caspian Capital LP, Farmstead Capital Management LLC, Lord Abbett & Co. LLC, Pacific Investment Management Company LLC, Venor Capital Management)
      • Legal: Willkie Farr & Gallagher LLP (Jennifer Hardy, Joseph Minias, Weston Eguchi)
    • Parent Company: Dynegy Inc.
      • Legal: White & Case LLP (Thomas Lauria, Matthew Brown)

Updated 3/26/17