London-based Noble Corporation and Plano-headquartered Denbury Resources filed for bankruptcy Friday in the U.S. District Court in the Southern District of Texas.
The general counsel for the two oil industry operations – Jim Matthews of Denbury and William Turcotte of Noble – selected legal and financial advisors that have made the bankruptcy courts in Houston their home away from home.
Matthews selected corporate restructuring powerhouse Kirkland & Ellis and co-counsel Jackson Walker to lead its bankruptcy efforts. In his ninth year as Denbury’s chief legal officer, Matthews chose Alvarez & Marsal as its restructuring advisor and Evercore as its financial advisor.
Kirkland partners Joshua Sussberg, Christopher Marcus and Rebecca Blake Chaikin in New York are lead counsel, while Jackson Walker partner Matt Cavenaugh of Houston is co-lead counsel.
Court documents show that various creditors and third parties are already lining up legal counsel, including Sidley partner Michael Fishel representing Tallgrass Pony Express Pipeline and Forshey Prostok partner Lunda Lankford advising ExxonMobil.
“The decision to ultimately pursue an in-court restructuring of the company was an extremely difficult one for the board and management,” Matthews told The Texas Lawbook in an exclusive interview. “However, when the determination was made that it was the appropriate time for Denbury to review and evaluate strategic opportunities and alternatives to maximize the value of the company for all of our stakeholders, the decision to hire Kirkland & Ellis was actually quite easy.”
Matthews said he worked with Kirkland lawyers previously and found them “extremely well prepared and remarkably knowledgeable about Denbury, our business and our assets.”
“Due to the fact this was such a critical path we were considering pursuing, I also completed some pretty significant due diligence on K&E, including contacting several colleagues and nonlegal professionals in the restructuring business to obtain some additional insight,” Matthews said. “The answer always came back the same: Kirkland is the best in the business.”
With Kirkland’s reputation comes large bills. Senior partners at the law firm charge in the range of $1,500 to $1,750 an hour.
Matthews said Denbury faces a “long, laborious and somewhat daunting process” going forward, but he feels the company has selected the legal and financial advisors needed to get the job done.
“While there is much work left to be done, we are in great hands,” he said.
Matthews said there were different reasons why Denbury chose to file for bankruptcy in the Southern District.
“We have a lot of land and operations in the Houston area,” he said. “Coupled with the fact that, for an oil and gas company, the SDTX is the most experienced, it was a logical choice.”
Once the decision was made to file in Houston, Matthews said he added Jackson Walker to the team.
“They also came highly recommended by the Kirkland & Ellis team, who advised me that Jackson Walker provides excellent co-counsel and conflicts services,” the general counsel stated. “Kirkland and Jackson Walker have also teamed up on many other cases and have significant experience working together. It also did not hurt that I began my career at Jackson Walker.”
Noble’s GC, Turcotte, a 1989 graduate of the University of Houston Law Center and lawyer at Noble for a dozen years, hired Skadden Arps and Porter Hedges as its legal counsel, Alix Partners as financial advisor and Evergroup as the investment banker.
Porter Hedges lawyers working on the restructuring include John Higgins, Eric English, M. Shane Johnson, Megan Young-John and Emily Nasir. Skadden partners Mark McDermott and Jason Kestecher of New York are listed as lead counsel for a team that included Corporate partner Frank Bayouth in Houston.
Porter Hedges and Higgins are also representing the second lien ad hoc committee in the bankruptcy of Denbury, which is an oil and gas upstream company focused on enhanced oil recovery using carbon dioxide. Denbury reported $4.6 billion in assets and $3.12 billion in liabilities.
Meanwhile, Jackson Walker’s Cavenaugh is advising the ad hoc group of legacy noteholders in the reorganization of Noble, which specializes in offshore drilling projects. Noble, which has its main U.S. headquarters in Sugar Land, claimed $7.26 billion in assets and $4.66 billion in debt.