NEW YORK, March 9, 2017 – Last week, Linn Energy, Inc., the reorganized successor to LINN Energy, LLC and its affiliated entities (collectively, “LINN”), a Houston-based oil and natural gas production company that filed for voluntary chapter 11 protection on May 11, 2016 in the US Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), announced its successful emergence from chapter 11 pursuant to a consensual plan of reorganization sponsored by the members of an ad hoc group of noteholders (the “LINN Noteholders”) represented by Milbank, Tweed, Hadley & McCloy LLP (“Milbank”).
Upon filing the chapter 11 cases, LINN and its debtor affiliates reported approximately $7.7 billion in outstanding funded debt on a consolidated basis, over $3 billion of which was owing under five series of senior unsecured notes, the majority of which were held by the LINN Noteholders represented by Milbank.
Over the course of the ensuing months, Milbank represented the LINN Noteholders in proposing, structuring, and negotiating a comprehensive restructuring transaction. The culmination of those efforts was a chapter 11 plan (the “LINN Plan”), the cornerstone of which was a $530 million new money rights offering that was fully-backstopped by certain of the LINN Noteholders represented by Milbank, and which provided for (i) the conversion of over $5 billion in unsecured notes debt into common equity in reorganized LINN, (ii) cash distributions to LINN’s other prepetition unsecured creditors from an approximately $40 million pool, and (iii) a $1.7 billion secured exit financing facility to LINN’s prepetition secured lenders in exchange for their claims.
The LINN Plan enjoyed broad support from each of LINN’s key creditor constituencies, and was confirmed by the Bankruptcy Court on January 24, 2017. On February 28, 2017, Linn Energy emerged from bankruptcy under the ownership of its unsecured creditors.
The Milbank team was led by partners Gerard Uzzi (Financial Restructuring) David Cohen (Litigation), Paul Denaro (Capital Markets), Matthew Hagopian (Project, Energy and Infrastructure Finance), Russ Kestenbaum (Tax), Mark Mandel (Corporate), Albert Pisa (Alternative Investments), Aaron Renenger (Litigation), and Manan (Mike) Shah (Executive Compensation and Employee Benefits), special counsel Brian Kelly (Corporate), and associates Sam Badawi (Capital Markets), Michael Price (Financial Restructuring) and Suzanne Szczetnikowicz (Project, Energy and Infrastructure Finance).
