“Probably the first firm you would think of for bankruptcy work in the oil and gas space."
Chambers USA 2015 - Bankruptcy / Restructuring
Baker Botts' bankruptcy lawyers guide and advise its clients through the treacherous terrain of out-of-court workouts, reorganization cases and liquidations. Our practice spans virtually every major industry and geographic region of the country and includes representation of financially-troubled companies, creditors, committees, asset acquirers and financial institutions in every aspect of complex reorganization proceedings. Chambers USA 2014 has recognized our practice as worthy of distinction in Band 1 in Bankruptcy/Restructuring.
We collaborate and work closely with our colleagues in other practices groups. As Baker Botts has always distinguished itself in the energy and natural resources industry, our bankruptcy and restructuring lawyers have substantial experience responding to dislocation and financial stress in commodity-driven industries. We represented ASARCO LLC, an integrated metals mining, smelting and refining company, in one of the most complex bankruptcy cases in U.S. history which resulted in full payment to all creditors. The presiding bankruptcy judge described the ASARCO bankruptcy as “probably the most successful Chapter 11 of any magnitude in the history of the [Bankruptcy] Code” and concluded that: “Baker Botts lawyers conducted themselves with the utmost professionalism and commitment, addressing an array of challenging legal issues with sophistication, creativity, and skill. . . . Few firms in the country have the breadth and depth of experience in different disciplines necessary to handle these cases with the skill demonstrated by Baker Botts.”
We have some of the most recent and relevant restructuring experience in the country in the energy sector. We represented Global Geophysical Services (GGS), a publicly-traded global oil and gas seismic company, in its chapter 11 reorganization proceeding in Texas. GGS reorganized and exited bankruptcy in February 2015, less than one year after filing for chapter 11 protection. In the GGS case, we implemented a contested interim priming DIP loan funded by an ad hoc group of existing GGS bondholders early in the case, initiated cross-border proceedings in Colombia to preserve assets from local enforcement action, and thereafter negotiated a rights-offering backstop and debt conversion agreement with the ad hoc group of DIP lenders, one of the first of its kind, designed to right-size the balance sheet in a challenging commodity price environment. Utilizing as negotiating leverage a debtor’s ability (i) to reject out-of-market contracts and (ii) to challenge pre-bankruptcy asset transfers that may be viewed as harming creditors, Baker Botts also assisted the Company in its negotiation of more favorable terms for key revenue and supplier contracts to improve EBITDA on a go-forward basis. We also assisted GGS in negotiating and closing new exit credit facilities—a first lien term and revolving facility and a second lien term facility—during one of the more volatile periods for oil and gas prices.
In addition, we also represented The Pacific Lumber Company (Palco) in its chapter 11 bankruptcy case. In that case, we preserved the nation’s last company-owned town and restructured $750 million in secured bonds, over the objection of the bondholders.
With restructuring professionals in both Texas and New York, Baker Botts also has developed a significant national practice in distressed asset dispositions and acquisitions. Depending on the needs of our clients, we have focused our representations on preservation of existing investments, enterprise-level acquisitions for strategic tax-planning purposes, and both strategic and financial acquisitions of performing assets.
Our lawyers’ buy-side experience in the energy industry includes representing:
- NRG Energy, Inc. in its $2.6 billion acquisition of Edison Mission Energy in its chapter 11 case pending in Chicago — one of the largest chapter 11 acquisitions of 2014
- The prevailing bidder in a $241 million acquisition of upstream oil and gas properties from debtor Crusader Energy under a confirmed chapter 11 plan
- The prevailing plan sponsor for ENRE LP’s oil and gas properties in the context of competing chapter 11 plans
- A private equity fund in its bid for power assets in the Optim bankruptcy in 2014 in Delaware
We currently represent various parties in the high-profile Energy Future Holdings case, one of the largest pending bankruptcy cases in the country. We also represented strategic asset purchasers in the Kodak and Nortel Networks bankruptcy cases, and represented a private equity fund in its acquisition of mining assets from Sterling Mining in Idaho. Our lawyers represented the acquirer of substantially all of the assets of Grubb & Ellis, one of the nation’s largest commercial real estate brokerage firms.
At Baker Botts, our innovation-minded approach to case management has made our group a leader in developing restructuring-focused solutions for companies struggling with mass tort liabilities, including the first ever prepackaged plan dealing with mass-tort claims (DynCorp - Fuller-Austin Insulation Company) and the largest ever mass-tort prepackaged plan (Halliburton-Dresser-KBR). We also structured and implemented an unprecedented procedure for estimation of billions of dollars of environmental claims at over 80 sites in nineteen different states, eliminating almost $5 billon of asserted environmental liabilities. We also developed an auction process to sell a $6 billion court judgment - believed to be the only bankruptcy auction of a litigation asset of this size.
Our experience includes a substantial number of out-of court workouts during the financial crisis in a number of industries, including midstream energy companies. Our lawyers represented a congressionally chartered cooperative bank in the restructuring of more than $500 million in liabilities and the sponsor of a portfolio of hospitality assets with liabilities exceeding $600 million. More recently, we completed the workout of $122 million of public bonds issued pursuant to federal infrastructure loan programs. We also represent technology companies and acquirers in assignments for the benefit of creditors.
“James Prince is recommended by his clients as a lawyer with ‘a good sense of balance and priority; he knows when to fight and when to settle.’ He is highly thought of in the market for his legal skill in finding out-of-court solutions to distressed situations.”
Chambers USA 2015 - Bankruptcy / Restructuring
On the creditor side, we represented creditors in the PetroRig and USEC chapter 11 cases, the lenders in the Raser Technologies bankruptcy and some of the largest trade creditors in the OGX bankruptcy in Brazil. Our lawyers have also represented the second lien lenders in the restructuring of commodities broker, R.J. O’Brien, the Ad Hoc Committee of Noteholders in Northwest Airlines and the mezzanine lenders to Highland Hospitality that acquired the portfolio of hospitality assets worth $1.5 billion in foreclosure. We frequently advise lenders and capital providers on structuring of complex financing and structured transactions to mitigate insolvency risks. We have substantial experience in negotiating and drafting intercreditor agreements in multi-tranche and uni-tranche lending arrangements, including intercreditor agreements in facilities led by some of the largest financial institutions in the Country.
Baker Botts also regularly represents clients in a broad range of bankruptcy-related litigation and pre-litigation matters. We obtained what is regarded as the largest fraudulent transfer judgment in history - a $6 billion judgment in Asarco v. Americas Mining Corporation; we also defended Pride International’s spin-off of Seahawk Drilling from fraudulent transfer challenge in Texas bankruptcy court. We are currently representing (i) the board of directors of Buccaneer Energy, an upstream, a publicly traded Australian oil and gas company, in Buccaneer’s bankruptcy case, (ii) an international energy company in a multi-million indemnification dispute related to a defendant’s purchase of hundreds of oil and gas leases in a Louisiana bankruptcy case, (iii) a defendant in multiple class actions arising from Freedom Industries’ 2014 chemical spill in Charleston, WV, and (iv) the U.S. trading arm of an international energy company in responding to an investigation brought against multiple oil majors by the chapter 7 trustee of Montreal, Maine and Atlantic Railway in Bangor, Maine.