Kirkland & Ellis partner Chad Nichols has jumped to Akin Gump Strauss Hauer & Feld in Houston.
The Northwestern-trained attorney specializes in private equity financings and debt restructurings in the energy industry, including special and distressed situations.
Nichols was brought in by Washington, D.C., partner Dan Fisher, who leads Akin Gump’s special situations practice and had worked with him in the past. Others involved were practice co-lead Fred Lee in Dallas, partner Tom McCaffrey in Houston and Houston partner-in-charge John Goodgame, who is co-head of the firm’s corporate practice.
Nichols said in an interview with The Texas Lawbook that he’s worked across from Akin Gump on a number of transactions in the past, many of which were special situations, and he was impressed with the level of sophistication of the advice to their clients and the coordination among their various practice groups.
“I enjoyed my time at K&E, where I have close friends and former colleagues,” he said. “But when John picked up the phone with others and gave me a call, this was an opportunity given my practice and I jumped at it.”
Goodgame said in the interview that the special situation practice spans the firm, with significant concentration in London, New York, Washington, D.C., and Dallas, but it didn’t have it in Houston.
“Chad’s practice lines up wonderfully with what we do well – special situations in debt finance – and aligns with our world class restructuring practice that has both debtor and sophisticated creditor components,” he said.
Nichols was an associate at Weil, Gotshal & Manges and Sidley Austin in Dallas before joining Kirkland in Houston in 2014. He became partner in 2018 after working on a big oil and gas deal: Advising Canada Pension Plan Investment Board-backed Encino Acquisition Partners on the underwritten financing for its $2 billion purchase of Chesapeake Energy’s Utica shale assets.
Before graduating from law school in 2012, Nichols was a senior associate at KPMG in Dallas and an associate at Deloitte & Touche in Los Angeles. He earned a bachelor of science in business administration from the University of Missouri-Columbia with an emphasis in finance, economics and real estate.
While at Kirkland, Nichols was part of the team that advised Mountain Capital-backed Revolution II WI Holding Co. on its December purchase of the onetime bankrupt Jones Energy II for $201.5 million in cash (Houston-based Mountain is led by former Apollo Global Management executive Sam Oh).
This past spring, Nichols also assisted Energy Capital Partners-backed Nesco Holdings I Inc. on its combination with SPAC Capitol Investment Corp. IV, giving it an enterprise value of $1.1 billion and the opportunity to go public.
Over his career, Nichols has worked on deals for Midstates Petroleum, EIG Global Energy Partners, Blackstone and Kayne Anderson, among others.
Akin Gump chairperson Kim Koopersmith in New York said in a release that with Nichols’ special situations experience and extensive work in the energy industry, he’ll be a strong complement to the firm’s top-tier practices in those areas as well as its market-leading restructuring practice.
Nichols said with commodity prices falling 70% to 80% from their highs in January, there are a lot of energy companies right now in immediate distress.
“Some don’t have pending maturities or covenant defaults, but they have counterparty risk,” he said. “We will be working with corporate borrowers to figure out ways to restructure and avoid bankruptcy, although maybe the answer is bankruptcy.”
Nichols also expects to work with private credit funds – many of which Akin Gump already advises – that will be looking at opportunities.
Goodgame said there’s real value in sophisticated debt counsel at difficult times like these, both on the borrower side but even more so on the credit side. “They want to make sure that the legal arrangements in which they’re investing their capital are where they want them to be,” he said.
It’s the beginning of the process, but Nichols thinks borrowers may be more willing early on to enter into debt-for-equity structures.
“Anything is really on the table right now, as we’re at a time where, frankly, we’ve never really been before,” he said. “There are structures being contemplated, but there’s nothing public yet. It’s going to be bespoke and that’s where Akin Gump will be able to add value for its clients.”
Goodgame agrees that the oil and gas industry is in “uncharted territory” with a very different market than during the last economic downturn in 2008-2009, when the shale business was beginning to grow.
“It would be hard to see real M&A activity in the near future except in a 363 [bankruptcy] sale context,” he said. “But there are entities with money that are looking to lend in various distress-related contexts. There are discussions happening in those spheres, but you hear people say, ‘Nobody wants to catch a falling knife.’ Is it a falling knife or isn’t it?'”
Akin Gump said its Houston office is now up to more than 70 lawyers out of 1,000 globally. The firm is celebrating its 75th anniversary this year.