Baker Botts' bankruptcy lawyers guide and advise their clients through the treacherous terrain of out-of-court workouts, reorganization cases and liquidations. Our Practice spans virtually every major industry and geographic region of the country and includes representation of financially-troubled companies, creditors, committees, asset acquirers and financial institutions in every aspect of complex reorganization proceedings.
We are currently working on some of the largest and most transformative financial restructuring matters in the energy and natural resource sector and are trusted advisors to several of the sector’s leading companies. The firm has had the lead role in eight complex, company-side restructurings, five in-court and three out-of-court, ranging in value from $50 million to $4 billion. We collaborate and work closely with our colleagues in other practices groups. As Baker Botts has always distinguished itself in the energy and natural resources industry, our bankruptcy and restructuring lawyers have substantial experience responding to dislocation and financial stress in commodity-driven industries. We represented ASARCO LLC, an integrated metals mining, smelting and refining company, in one of the most complex bankruptcy cases in U.S. history. Judge Richard S. Schmidt, the presiding bankruptcy judge, described the ASARCO bankruptcy as “probably the most successful Chapter 11 of any magnitude in the history of the [Bankruptcy] Code” and concluded that: “Baker Botts lawyers conducted themselves with the utmost professionalism and commitment, addressing an array of challenging legal issues with sophistication, creativity, and skill. . . . Few firms in the country have the breadth and depth of experience in different disciplines necessary to handle these cases with the skill demonstrated by Baker Botts.”
Representative Experience Both In and Out of Court
With restructuring professionals in both Texas and New York, we have some of the most recent and relevant restructuring experience in the country in the energy and natural resource sector, including:
- NRG Energy, Inc., pre-negotiated in-court restructuring of $4 billion of debt of GenOn Energy, an NRG subsidiary
- Seventy Seven Energy, pre-packaged in-court restructuring of $1.1 billion of debt to equity; 60-day court process
- ETX Energy (f/k/a New Gulf Resources), pre-negotiated in-court restructuring of $530 million of debt to equity with $135 million of new convertible secured PIK notes on exit; 120-day court process
- Appalachian Basin E&P Company, out-of-court restructuring and sale of major E&P and midstream company that owns and operates approximately 4,400 wells, 2,600 miles of pipeline, and nearly a million acres in North America
- Hercules Offshore, pre-packaged in-court restructuring of $1.2 billion of debt to equity with $450 million of new financing on exit; 60-day court process
- Bakken E&P Company, out-of-court workout of $200 million of secured notes
- Global Geophysical Services, free-fall in-court restructuring of $263 million of debt and $153 million in post-bankruptcy financing converted to equity and portion to new second lien notes; plan confirmed in less than one year
- The Pacific Lumber Company (Palco), in-court restructuring, preserved the nation's last company-owned town and restructured $750 million in secured bonds, over the objection of the bondholders
- ASARCO, free fall in-court restructuring; involved nearly $10 billion of asserted asbestos, environmental, bond and toxic tort liabilities. Prosecuted complex fraudulent transfer claims; judgment received, valued at between $7 and $10 billion, believed to be the largest fraudulent transfer judgment in Chapter 11 history. Payment in full plan confirmed; fee enhancement awarded for superior performance
- Xtreme Power, an energy storage systems company, in the sale of substantially all its assets in chapter 11
- Largest bondholder and controlling shareholder in disputes with BOEM/BSEE, predecessors, and surety issuers to restructure material offshore P&A liabilities
- Public E&P company in out-of-court liability management of over $750 million of bank and bond debt
At Baker Botts, our approach to complex problems has made our group a leader in developing restructuring-focused solutions for companies struggling with mass tort liabilities, including the first ever prepackaged plan dealing with mass-tort claims (DynCorp - Fuller-Austin Insulation Company) and the largest ever mass-tort prepackaged plan (Halliburton-Dresser-KBR). Our lawyers represented Pfizer in developing a chapter 11 solution for asbestos claims against subsidiary, Quigley Company, Inc. As ASARCO's restructuring counsel, we developed a chapter 11 solution for asbestos and other mass tort claims against ASARCO and its asbestos-product manufacturing subsidiaries. We structured and implemented a procedure for an estimation of environmental claims at over 80 sites in nineteen different states, eliminating $5 billon of asserted environmental liabilities. We also developed an auction process to sell a $7 billion court judgment - believed to be the only bankruptcy auction of a litigation asset of this size.
Our experience includes a substantial number of out-of-court workouts during the financial crisis in several industries. Our lawyers represented a congressionally chartered cooperative bank in the restructuring of $500 million in liabilities and the sponsor of a portfolio of hospitality assets with liabilities of $600 million. More recently, we completed the workout of $122 million of public bonds issued pursuant to federal infrastructure loan programs. We also represent technology companies and acquirers in assignments for the benefit of creditors.
We Do More than Just Restructure Debt…
Depending on the needs of our clients, we have focused our representations on preservation of existing investments, and both strategic and financial divestitures and acquisitions of assets. For example, our lawyers' buy-side experience in the energy industry alone includes representing:
- NRG Energy, Inc. in its $2.6 billion acquisition of Edison Mission Energy in its chapter 11 case
- Acquisition of various power projects from the SunEdison bankruptcy case in New York in 2017 for approximately $300 million
- Hunt Consolidated in its attempted $17 billion acquisition of the ONCOR business from Energy Future Holdings
- Private equity group's acquisition of distressed oil and gas assets in 2017
- Apollo-backed bidder in bankruptcy auction of Stone Energy's onshore assets in 2017
- Private-equity backed bidder in bankruptcy auction of Samson Resources’ upstream asset package
- Acquisition of overriding royalty interests in the Maxus bankruptcy case
- The prevailing bidder in a $241 million acquisition of upstream oil and gas properties from Crusader Energy under confirmed chapter 11 plan
- A private equity fund in its bid for power assets in the Optim bankruptcy
We also represented strategic asset purchasers in the Kodak and Nortel Networks bankruptcy cases, and represented a private equity fund in its acquisition of mining assets from Sterling Mining in Idaho. Our lawyers represented the acquirer of substantially all of the assets of Grubb & Ellis, one of the nation's largest commercial real estate brokerage firms.
Select Creditor and Sponsor Representations
On the creditor side, we are currently representing an ad hoc committee of bondholders in the Seadrill Limited chapter 11, one of the largest chapter 11 cases filed in 2017, in their competing bid to acquire the company on exit or otherwise improve recoveries to bondholders. Our attorneys have also represented ad hoc committees of bondholders in other complex and litigious bankruptcy cases, including, In re Caesars Entertainment Operating Company, In re AbitibiBowater and In re Motors Liquidation Company (GM). We also represented or represent creditors or equity sponsors in the chapter 11 cases of EXCO Resources, Samson Resources, Peabody Energy, Azure Midstream, Black Elk Energy, Sherwin Alumina, Vitro Asset Corp., PetroRig and USEC chapter 11 cases, the lenders in the Raser Technologies bankruptcy and some of the largest trade creditors in the OGX bankruptcy in Brazil. Our lawyers have also represented the second lien lenders in the restructuring of commodities broker, R.J. O'Brien, the Ad Hoc Committee of Noteholders in Northwest Airlines and the mezzanine lenders to Highland Hospitality that acquired the portfolio of hospitality assets worth $1.5 billion in foreclosure. We frequently advise lenders and capital providers on structuring of complex financing and structured transactions to mitigate insolvency risks. We have substantial experience in negotiating and drafting intercreditor agreements in multi-tranche and uni-tranche lending arrangements, including intercreditor agreements in facilities led by some of the largest financial institutions in the Country.
Baker Botts also regularly represents clients in a broad range of bankruptcy-related litigation and pre-litigation matters. We received what is regarded as the largest fraudulent transfer judgment in history - a $7 billion judgment in Asarco v. Americas Mining Corporation. We also defended Pride International's spin-off of Seahawk Drilling from fraudulent transfer challenge in Texas bankruptcy court. We recently received a $63 million judgment representing a multinational energy corporation in the Texas Supreme Court in an indemnification dispute related to a defendant's purchase of hundreds of oil and gas leases in a Louisiana bankruptcy case. We received an expeditious dismissal of a chapter 11 case on behalf of a client that was involved in a multi-year litigation with a defendant that sought bankruptcy protection. We also represented the U.S. trading arm of an international energy company in connection with a dual Canada/U.S. insolvency proceeding, resulting in the settlement of asserted toxic tort claims. We also have substantial experience in preference litigation.
Texas Lawbook, The
S P Global
Washington Post Online, The
Houston Bankruptcy Court Determines That a Make-Whole Claim Is Not Disallowed by the Bankruptcy Code and the Solvent Debtor Exception Still Exists Under the Bankruptcy CodeExternal Article
Pratt's Journal of Bankruptcy Law
Houston Bankruptcy Court Determines (1) Make-Whole Claim is Not Disallowed by the Bankruptcy Code and (2) Solvent Debtor Exception Still Exists under the Bankruptcy CodeClient Updates
Pratt's Journal of Bankruptcy Law
Trends in Early Adoptions of New SEC Rules Relating to Guarantors and Issuers of Guaranteed SecuritiesClient Updates
94 Am. Bankr. L. J. 357, Chapter 11
SSRN 94 Am. Bankr. L. J. 357 (2020)
SEC Extends Conditional Filing Relief to Companies Affected by Coronavirus; Provides COVID-19 Disclosure GuidanceClient Updates
American Bankruptcy Institute
New Proposed Regulations Provide Welcome Transition Relief From Application of Onerous Proposed Section 382 Net Operating Loss Limitation Rules to Certain M&A TransactionsClient Updates
Bankruptcy Court Upholds Validity of "Golden Share" Blocking Provision in Corporate Formation Documents to Dismiss Chapter 11―Asks Fifth Circuit to Accept Direct Review Given Importance of IssueClient Updates
On Thursday, November 12, 11:00 a.m.-12:00 p.m. CT, our Baker Botts corporate partners discussed the policy and legal aspects related to companies managing their business in the energy industry into 2021 and beyond.
Impacts of Recent U.S. Tax Reform Guidance on International M&A and Post-Transaction Restructurings
On November 10, 1:00 p.m.-2:00 p.m. CT, please join Baker Botts Partners Jon Lobb and Ron Scharnberg for a webinar discussing and analyzing how recent tax reform regulations and other guidance impacts international M&A and post-transaction restructurings.
Baker Botts will be hosting a webinar on the legal issues surrounding the recent sharp price fall in crude oil and will be joined by Mark Finley from Rice University's Baker Institute.