Business Finance & Restructuring Representations
Representation of AES Eastern Energy, L.P., a subsidiary of AES Corporation, a global power company that owned and operated a diverse portfolio of electricity generation and distribution businesses in 27 countries, and its debtor affiliates in their chapter 11 cases. With Weil’s assistance, AES Eastern brokered a consensual global settlement that effectively recharacterized a complicated and onerous leverage lease into a secured financing. The settlement paved the way for AES Eastern to preserve the going concern value of its two most valuable power plants and increase its liquidity through the successful sale of those plants for a $240 million credit bid, the assumption of potentially significant environmental and employee liabilities, and approximately $13.5 million in cash. Weil also played a key role in the negotiation and successful consummation of the sale of AES Eastern’s remaining four nonoperating power plants. Additionally, Weil and the creditors’ committee successfully negotiated a $47 million cash payment from AES Eastern’s parent company, AES Corp., in exchange for the release of the debtors’ fraudulent transfer claims against the parent. In less than one year after commencing the chapter 11 case, AES Eastern confirmed, effectuated, and made distributions to the overwhelming majority of creditors under its chapter 11 plan of liquidation. Weil’s expertise helped AES Eastern wind down its business responsibly, with minimal litigation expense and delay, enabling it to avert administrative insolvency and maximize the value of its estates for distribution to creditors.
Citicorp North America, Inc., as joint lead arranger and joint bookrunner with Barclays Bank, and Citibank, N.A. as administrative agent, in connection with $500 million superpriority senior secured debtor in possession new money, first out credit facility for Patriot Coal Corporation and its affiliated debtors in their chapter 11 cases. Prior to the commencement of the chapter 11 cases, Weil assisted Citi and Barclays in negotiating and obtaining the new money DIP facility for Patriot by working with Citi and Barclays to construct a creative solution with respect to certain collateral disposition issues as well as to ensure that Patriot’s existing lenders (who became the second out lenders under the DIP facility) would be willing to participate on a nonpriming, but nonetheless subordinate, basis. The DIP facility was paid in full, in cash, under the chapter 11 plan.
Representation of SemGroup LP, a leading midstream energy and trading company, in one of the largest chapter 11 cases in 2008, with total debt approximating $5 billion. Beginning as a free fall chapter 11 case following SemGroup’s surprise announcement of approximately $2.5 billion in trading losses, the case involved U.S. and Canadian crossborder insolvency issues and conflicting priorities of various U.S. state oil and gas lien statutes and UCC filings, many of which were issues of first impression. Notwithstanding the contentiousness resulting from the combination of unique legal issues and surprisingly large losses allegedly caused by fraud, Weil guided SemGroup in successfully negotiating a chapter 11 plan that ultimately was supported by all major creditor constituencies and was confirmed after eighty separate objections from fifty-nine parties were resolved by Weil or overruled by the Court. SemGroup emerged from chapter 11 as a reorganized public company and distributed more than $2.5 billion in value to its stakeholders.
Representation of Express Energy Services Operating, LP, a leading provider of services to the U.S. oil and gas exploration and production industry, and twenty-three affiliated debtors in their prenegotiated chapter 11 cases. Prior to commencing the chapter 11 cases, with Weil’s assistance, Express Energy negotiated a restructuring plan with a majority of its largest secured creditors. The plan, which provided senior secured creditors with 98% of the equity in the reorganized company, was confirmed less than six weeks after the commencement of the chapter 11 cases.
Representation of Hawkeye Renewables, LLC, a subsidairy of Hawkeye Energy Holdings LLC, an Iowa-based producer of ethanol and distillers grains, in its prepackaged chapter 11 case. Prior to commencing the case, Weil assisted Hawkeye in negotiating a plan of reorganization with its first lien lenders that restructured $761 million of indebtedness and included a debt-to-equity conversion. The plan was confirmed approximately six months after the commencement of the case and was consummated less than two weeks later.
Representation of Liberty Harbor Special Investments, LLC and Goldman Sachs Palmetto State Credit Fund, L.P., funds managed by Goldman Sachs Asset Management, as prepetition creditors in the chapter 11 case of Ener1. With Weil’s assistance, the Goldman funds, Ener1, and certain other key creditor constituencies successfully negotiated a prepackaged bankruptcy which reduced Ener1’s funded debt from approximately $91 million to less than $46 million and provided an infusion of up to $81 million in new capital to support Ener1’s long-term business objectives and strategic plan.
Representation of Enron Corporation, one of the world’s major energy, commodities, and services companies, in its chapter 11 cases, the culmination of which saved 24,000 jobs, all operating businesses, and $12 billion of going-concern value through sales of various assets and subsidiaries around the globe and distribution of equity in other business units to creditors.