NEW YORK, Milbank, Tweed, Hadley & McCloy LLP successfully represented the Ad Hoc Committee of Second Lien Noteholders in the restructuring of Energy XXI Ltd., an offshore oil and gas driller which won bankruptcy-court approval of its chapter 11 plan on December 13, 2016 after extensive negotiations with its stakeholders.
Energy XXI (collectively with certain of its subsidiaries and affiliates, the “Debtors”) filed for chapter 11 bankruptcy protection on April 14, 2016, after the historic drop in oil and gas prices, with approximately $3 billion in funded debt. The Debtors and their key stakeholders participated in a lengthy mediation process before resolving numerous disputes through a comprehensive settlement.
Under the confirmed plan, second lien noteholders, with approximately $1.8 billion in claims, will receive 84% of the new equity in the reorganized company, becoming the majority shareholders. The Debtors’ first lien lenders will have their prepetition claims converted into a new three-year secured credit facility. Holders of the unsecured notes issued by both Energy XXI Gulf Coast, Inc. and EPL Oil & Gas, Inc. will receive the remaining equity in the reorganized company as well as warrants.
The Milbank team was led by Financial Restructuring partners Dennis Dunne and Samuel Khalil. 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 associate Matthew Brod.
