Milbank, Tweed, Hadley & McCloy LLP (MTHM) has recently advised independent energy producer Penn Virginia Corp. (Penn Virginia), whose Chapter 11 reorganisation plan was approved by a US bankruptcy Court judge on 11 August 2016.
Penn Virginia, one of the largest oil and natural gas drillers in Texas' Eagle Ford Shale, will be owned by the company’s noteholders and unsecured creditors as a result of the reorganisation.
Penn Virginia entered Chapter 11 in May with a pre-negotiated plan of reorganisation, which was supported by revolving credit lenders and almost all of its noteholders. The company subsequently reached agreements with equity security holders and pipeline contractor, Republic Midstream. The cases were some of the fastest in the oil and gas sector to date, reaching confirmation of the plan of reorganisation just 3 months after the petition date.
The plan eliminates more than US$1 billion of debt and includes a US$50 million rights offering of new equity. Upon the effective date of the plan of reorganisation, the noteholders will hold approximately 96% of the equity in the reorganised Penn Virginia.
The entirely consensual plan avoided potential litigation with various contract parties and an ad hoc equity committee and involved approval of a hedging programme on day one that was a key piece to noteholder committee financing.
Adapted from press release byAnna Nicklin
Read the article online at: https://www.worldpipelines.com/business-news/18082016/penn-virginia-reorganises-to-eliminate-debt/