Cross‐Practice Team Advises Wells Fargo on Legacy Reserves Successful Chapter 11 Restructuring

December.18.2019

Legacy Reserves Inc. and certain of its subsidiaries announced on December 11, 2019 that they have emerged from chapter 11 bankruptcy proceedings in the Southern District of Texas Bankruptcy Court, successfully completing their $1 billion financial restructuring and implementing the confirmed plan of reorganization. Orrick represented Wells Fargo in its capacity as the administrative agent for the prepetition $575 million first-lien reserve-based financing, the $350 million debtor-in-possession financing and a $500 million committed exit facility under a restructuring support agreement.

Over the objection of the Official Committee of Unsecured Creditors, after a two-week plan confirmation trial, the judge confirmed the plan of reorganization supported by Wells Fargo. This allowed the company to significantly reduce its debt through a combination of an equitization of existing debt and approximately $255 million of new equity capital from GSO. The company will emerge with $388 million of total debt outstanding, all of which is under a new reserve-based credit facility. The plan of reorganization resulted in a full cash repayment for Wells Fargo and all lenders under the prepetition first-lien reserve-based facility and the debtor-in-possession facility.

Legacy Reserves Inc. is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States.

Our cross-practice team that advised Wells Fargo on the restructuring included lawyers from our Restructuring, Energy & Infrastructure, Banking & Finance, Derivatives and Complex Litigation and Dispute Resolution teams and was led by Raniero D’Aversa and Laura Metzger and included Jonathan Ayre, Nikiforos Mathews, Joseph Choi, Joe Lawlor, Darrell Thomas, Kelsi Cronkhite, Ryan Wooten, Monica Perrigino, Caroline Wyatt and Nick Sabatino and others.