The honor was given in recognition of Reed Smith’s representation of Rockdale Marcellus in the Chapter 11 sale of nearly all its assets to Repsol for $222 million.
The team was also honored for crafting an extremely well-received bankruptcy plan that will return an estimated $255 million of cash to creditors.
Dallas- and Houston-based Restructuring & Insolvency partner Omar Alaniz, who served as lead outside counsel to Rockdale Marcellus in the matter, accepted the award last night on behalf of Reed Smith at MA Global Network’s Restructuring & Distressed Investing 14th Annual Forum 2022.
In detailing the success of the plan, Alaniz praised the Reed Smith team, which included Restructuring & Insolvency partners Luke Sizemore and Jared Roach, and associate Alexis Leventhal, who led on the winning bankruptcy and insolvency plan; and Energy & Natural Resources partner Ryan Purpura and associate Ryan Haddad, who led the transactional aspects of the deal; as well as many others who formed an “all-star legal team that put their hearts and souls into this case.”
Alaniz also acknowledged the teams from Huron Consulting, Houlihan Lokey, and Quinn Emmanuel who were “all essential players in obtaining the magnificent results for Rockdale’s estate.”
About the Cross-Border Special Situation M&A Deal of the Year
Before Rockdale Marcellus settled on an insolvency plan that best suited its objectives, Reed Smith helped the client explore a number of restructuring alternatives. Those alternatives included a sale process in Q1 and Q2 of 2021 that was trending towards a $50 million sale price.
However, the company ultimately determined that the chapter 11 process would be the best value maximizing process, and the results speak for themselves. On September 21, 2021, Rockdale filed a petition seeking relief under chapter 11 of the United States Bankruptcy Code. Ultimately, 100% of voting creditors would accept the plan, which yielded considerably more than expected.
“Reflecting back on our process, the debtors’ professionals employed two guiding principles,” Alaniz said. “First, we believed keeping a deliberate and driving pace would maximize value in Rockdale’s chapter 11 process. Second, building consensus and minimizing disputes were also drivers in getting to the finish line quicker and more efficiently.”
These concepts drove the Reed Smith sale process, which created a forum that shifted the fulcrum during a spirited competitive auction that took place in Reed Smith’s Dallas office on December 16, 2021 and lasted nearly 12 hours. The auction began with a bid of ~$195 million by one party and ended with a final sale price of $222 million to Madrid-based global energy company Repsol.
The sale process ultimately yielded a total $224 million in value, which was sufficient to pay off the company’s secured indebtedness, including its DIP lender, first-lien debt, second-lien debt, and third-party hedge counterparties.
Following the auction, and with proceeds left over after the secured creditor payoff, the Reed Smith team then shifted its focus to constructing a chapter 11 plan that would put the most money in unsecured creditors’ pockets in the most expeditious way.
First, the firm created a convenience class of approximately 45 creditors that received a 50% distribution. It then worked expeditiously to resolve as many claims as possible before the bankruptcy hearing, on the theory that the sooner all claims are resolved, the sooner distributions can be made to all remaining creditors holding allowed claims.
To that end, the Reed Smith team resolved some 290 claims in three months, through claim objections, stipulations, and negotiated resolutions of claim withdrawals and amendments.
On December 29 2021, the U.S. Bankruptcy Court for the Western District of Pennsylvania approved the auction results and sale to Repsol, effectively ending the bankruptcy process.
U.S. Bankruptcy Judge Gregory L. Taddonio called the sale “excellent,” noting that it not only generated significantly more money than what Rockdale had anticipated, but also helped resolve several disputes among the various parties.
“There’s been significant future cost savings separate and apart from the value that’s laid on the table here, which is hopefully apparent for all to see that this is a tremendous result,” the judge said.
The deal formally closed in January and completion of the deal was confirmed by all parties in April 2022.