As expected, Houston oil and gas engineering and construction services provider McDermott International announced Jan. 21 that it was filing for Chapter 11 in U.S. Bankruptcy Court for the Southern District of Texas with the hope of erasing more than $4.6 billion in debt.
Texas attorneys from at least six law firms are advising the various parties in the process.
Kirkland & Ellis is counseling McDermott, with Texas team members including partners Andrew Calder, Adam Larson, Brooks Antweil, Ahmed Sidik and Anna Rotman in Houston and partner Lucas Spivey, who offices out of Dallas and Houston.
Jackson Walker is the company’s local legal counsel, including partners Elizabeth Freeman and Matthew Cavenaugh in Houston.
Baker Botts is corporate legal counsel, including corporate partners Ted Paris and James Mayor and associates Steven Lackey, Sean Aguirre, Nathaniel Richards, Malakeh Hijazi, Joshua Dunegan, Daniel Jung and Lauren Richter, all of Houston. Others involved are finance partner Luke Weedon in Dallas, senior associate Clint Culpepper in Austin and associates Josh Espinosa and Taylor Courtade in Dallas.
Bracewell is legal counsel to the revolving lenders’ agent, Crédit Agricole, including Texas partners William A. Wood III and Manuel Vera, counsel Leslie M. Hansen and associates Sylvia Cherem, Christie L. Latimer, Jason W. Keating, Emily A. Banse, Kenni E. Callahan and Kathy Witty Medford. All are in Houston except for Latimer, who is in Dallas.
Weil, Gotshal & Manges partner Alfredo Pérez and associate Clifford Carlson in Houston are counseling the Zachry Group, a joint venture partner of the debtor’s, Pérez confirmed.
Porter Hedges partners John Higgins and Joshua Wolfshohl in Houston are serving as local counsel for the term loan lenders or the term loan lenders’ agent, a source involved in the bankruptcy said. The firm’s representation couldn’t be immediately confirmed.
Other Texas attorneys involved in the case are Charles A. Beckham Jr. at Haynes and Boone representing interested party Chiyoda International Corp.; Henry Flores at Rapp & Krock for the ad hoc noteholder groups; Paul M. Green at Jones Day for creditor Cameron LNG; and Ashley L. Harper at Hunton Andrews Kurth for creditor UMB Bank (as successor indenture trustee for senior notes).
Still others are T. Josh Judd at Andrews Myers for creditor Bo-Mac Contractors Ltd.; Patrick Andrew Kelly, also of Andrews Myers, for creditor Apache Industrial Services Inc.; Hugh Massey Ray III at Pillsbury Winthrop Shaw Pittman for interested party Illuminate Buyer LLC; and William Ross Spence at Snow Spence Green for creditor Curtis Kelly Inc.
Davis Polk & Wardwell is legal counsel to the term loan lenders and Latham & Watkins is legal counsel to the term loan lenders’ agent. Linklaters is legal counsel to the revolving lenders. Paul, Weiss, Rifkind, Wharton & Garrison and Brown Rudnick are legal counsel to the bondholders.
Arias, Fabrega & Fabrega is McDermott’s Panamanian legal counsel and Prime Clerk is administrative agent.
McDermott’s chief legal officer is John Freeman, who has been at the company for two-and-a-half years. He previously was general counsel for Technip for seven-plus years and worked in the legal department of Baker Hughes for five years.
Evercore Group is McDermott’s financial advisor and AP Services, an affiliate of AlixPartners, is the company’s operational advisor. Centerview Partners is financial advisor to the term loan lenders and Barclays is agent to the term loan lenders.
FTI Consulting is financial advisor to Crédit Agricole. Houlihan Lokey Inc. is financial advisor to the bondholders.
McDermott said it has the support of more than two-thirds of all its funded debt creditors for a restructuring that will equitize nearly all of its funded debt.
The company also said it agreed to sell its Lummus Technology unit to the Chatterjee Group and the Rhône Group for $2.725 billion, the proceeds from which it will use to repay the $2.81 billion debtor-in-possession financing facility in full.
Kirkland advised McDermott on the sale, including Larson, Sidik and associate Bryan Jones. Paul Weiss counseled the buyers (partner Brian C. Lavin and counsel Chaim P. Theil in New York).
The company said the restructuring will create a sustainable capital structure that matches the strength of its operating business. It expects to emerge a stronger, more competitive company with a solid financial foundation to build upon its reputation as a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry.
McDermott has struggled after reporting losses on large liquefied natural gas construction projects and due to the general malaise of the oil and gas industry.