September 25, 2017

Firm Secures Complete Victory for Unsecured Creditors of Ultra Resources in Connection with Chapter 11 Cases


Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of unsecured creditors of Ultra Resources, Inc. in connection with the chapter 11 cases for Ultra Petroleum Corp., an oil and natural gas exploration and production enterprise, and its affiliates before the US Bankruptcy Court for the Southern District of Texas. Following litigation with the ad hoc committee, the debtors proposed a chapter 11 plan that provides for 100% cash payment of the allowed claims of unsecured creditors of Ultra Resources. The court confirmed the chapter 11 plan on March 14, 2017.

After plan confirmation, litigation continued with respect to claims asserted by holders of indebtedness under several series of notes and a credit agreement for a $201 million makewhole premium and postpetition interest and other related fees and expenses, totaling approximately $400 million. On September 21, 2017, the court overruled the debtors’ objection to the claims, determining that the noteholders were entitled to receive the makewhole premium that was triggered by the debtors’ bankruptcy filing and that the debtors were required to pay interest on overdue amounts under the notes and the credit agreement at the contractual default rates.

The court’s decision delivers the ad hoc committee represented by Milbank a complete victory and represents the culmination of Milbank’s efforts to obtain a full recovery for their committee members on account of their unsecured claims in the chapter 11 cases. The court’s opinion also constitutes a significant decision supporting the enforceability of makewhole premiums under New York law and regarding when a claim is impaired by a chapter 11 plan.

The Milbank team is led by Financial Restructuring partners Dennis Dunne, Evan Fleck and Lauren Doyle and Financial Restructuring and Litigation partner Andrew Leblanc. The team also includes Financial Restructuring associate Nelly Almeida, Litigation associates Melanie Yanez, James Burke and Emily Glaser; and Alternative Investments partner Al Pisa and associate Maya Grant.