Milbank has successfully represented the Official Committee of Unsecured Creditors of Breitburn Energy Partners LP (“the Company” or “Breitburn”) in its chapter 11 restructuring.
Breitburn, a publicly traded energy holding and development partnership, filed for chapter 11 bankruptcy protection with the US Bankruptcy Court for the Southern District of New York on May 15, 2016 to facilitate the restructuring of its balance sheet. At the time of filling, the Company reported assets of $4.7 billion and debts of $3.4 billion.
Breitburn’s amended Reorganization Plan (the “Plan”) was confirmed on March 23, 2018 after it was modified to increase recoveries for non-“accredited” bondholders. The confirmation puts to rest a contentious plan negotiation process that began when the Company filed for bankruptcy almost two years ago. Breitburn is expected to emerge from chapter 11 within the next week.
Under the amended Plan, the Debtors will be split into two companies: a newly formed entity (“PermianCo”) will acquire the Debtors’ undeveloped Permian-based acreage, while a separate entity (“LegacyCo”) will hold the Debtors’ legacy assets. PermianCo will own 7.5% of the equity interests in LegacyCo. The Plan also provides accredited holders of the Debtors’ unsecured notes with the right to participate in a rights offering for the new equity interests to be issued by PermianCo. Furthermore, non-accredited holders of the Debtors’ unsecured notes will receive either cash or a combination of cash and stock equal to an approximately 11.94% recovery of such holders’ claims. General unsecured creditors will also receive an 11.94% recovery in the form of a cash payment, provided that certain of the general unsecured creditors also have the right to elect to a stock-based recovery. In addition, trade vendors and suppliers who will continue to transact with the Company will have their claims paid in full.
The Milbank team was led by partners Gregory Bray and Paul Aronzon (Financial Restructuring) and included partners Andrew Leblanc (Financial Restructuring and Litigation & Arbitration), Melainie Mansfield (Corporate), Eric Reimer (Corporate) and Russell Kestenbaum (Tax); special counsel Haig Maghakian (Financial Restructuring) and Alexander Lees (Litigation & Arbitration); and associates James Behrens (Financial Restructuring), Erin Dexter (Litigation & Arbitration), Jessica Dombroff (Corporate), and Nigel Stacey (Litigation & Arbitration).
