Milbank was victorious in a bankruptcy appeal concerning the chapter 11 reorganization of Vantage Drilling International (“VDI”). Formerly known as Offshore Group Investment Limited, VDI is an offshore drilling company that consummated a chapter 11 plan of reorganization in February 2016 and has been operating successfully outside of bankruptcy ever since.
During the bankruptcy proceeding, Nobu Su, an equity owner of VDI’s parent company, objected to the chapter 11 plan based on allegations that it was the product of mismanagement at the parent-company level. Milbank, representing a group of creditors that supported the plan, helped persuade the bankruptcy judge that Su had no standing to object, since VDI’s parent company was not a debtor in the proceedings, and a shareholder of a shareholder of a debtor does not have a sufficient stake in the outcome of a chapter 11 case to be heard. The bankruptcy court agreed, denied Su standing to object, and confirmed VDI’s plan.
Su then appealed to the federal district court in Delaware, seeking vacatur of the confirmation order. If awarded, this relief would have nullified Vantage’s reorganization and possibly required Vantage to return to bankruptcy with no clear path forward. VDI hired Milbank to represent it in the appeal.
Through the efforts of the Milbank team, Vantage was successful in fighting against the appeal and preserving VDI’s reorganization plan. On June 21, 2019, Judge Maryellen Noreika issued a decision adopting Milbank’s arguments and affirming the bankruptcy court’s rulings in full. She held that Su did not have standing to object in VDI’s bankruptcy proceeding, and that in any event, his objections to the plan were meritless. The result is a great victory for VDI, which now has clarity and confidence that its reorganization and new capital structure will remain intact.
The Milbank team on appeal was led by partners Evan Fleck (Financial Restructuring), Alexander Lees (Financial Restructuring and Litigation & Arbitration), and Matthew Brod (Financial Restructuring).
