NEW YORK, March 17, 2017 – Milbank, Tweed, Hadley & McCloy LLP represented the Ad Hoc Committee (the “Ad Hoc Committee”) of holders of certain unsecured notes (the “Notes”) in the restructuring of Chaparral Energy, Inc. and its affiliates (collectively, “Chaparral”).
Oklahoma-based Chaparral, which explores for oil and gas in the Mid-Continent region of the US and is a leading player in the STACK play, voluntarily sought chapter 11 protection in May 2016 in the US Bankruptcy Court for the District of Delaware. As of the commencement of its chapter 11 cases, Chaparral reported liabilities of over $1.7 billion, including approximately $1.2 billion outstanding under the Notes.
After several months of negotiations among the Ad Hoc Committee, Chaparral’s pre-petition secured lenders, and the company, in December 2016, Chaparral filed a largely consensual chapter 11 plan (the “Plan”). On March 10, 2017, the Bankruptcy Court confirmed the Plan, paving the way for Chaparral to emerge from bankruptcy on March 17, 2017.
The Plan calls for, among other things, a new money rights offering for unsecured creditors that is fully backstopped by the members of the Ad Hoc Committee, the exchange of all outstanding Notes for the equity in the reorganized company, and a post-emergence secured financing facility to be provided by Chaparral’s pre-petition secured lenders. Upon emergence from bankruptcy, the company expects to have liquidity in excess of $100 million, and will be under the ownership of its pre-petition unsecured creditors.
Milbank represented the Ad Hoc Committee in extensive pre- and post-filing negotiations with Chaparral and its stakeholders regarding the restructuring of Chaparral’s debt obligations, and continues to represent the Ad Hoc Committee in the chapter 11 cases.
The Milbank team was led by Financial Restructuring partner Evan Fleck. Also advising the Ad Hoc Committee were Litigation and Financial Restructuring partner Andrew Leblanc; Litigation partner Aaron Renenger; Corporate partners Scott Golenbock and Eric Reimer; Capital Markets partner Paul Denaro; Tax partner Russell Kestenbaum, Executive Compensation and Employee Benefits partner Manan (Mike) Shah; and Financial Restructuring associates Michael Price and Brian Zucco.
The original press release can be found here on the Milbank website.