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May 03, 2021

Valaris Successfully Emerges From Chapter 11

On April 30, 2021, Valaris and its affiliated debtors emerged from Chapter 11 bankruptcy following a successful in-court restructuring process before Judge Isgur in the Southern District of Texas Bankruptcy Court. The comprehensive restructuring of Valaris, one of the largest oil rig-owning companies in the world, reduced the company’s funded debt from more than $7 billion to $550 million.

Kramer Levin represented an ad hoc group of bondholders holding more than $4 billion of outstanding notes. The Kramer Levin team, working with Houlihan Lokey as investment banker and financial advisor, Akin Gump as U.K. counsel, and Porter Hedges as local counsel, guided the ad hoc group through complex, multiparty negotiations that ultimately led to a fully consensual Chapter 11 plan of reorganization confirmed by the bankruptcy court on March 3.

Prior to the bankruptcy filing on Aug. 19, 2020, Kramer Levin negotiated a restructuring support agreement between the ad hoc group and the debtors, which provided for the conversion of Valaris debt into equity, pursuant to a Chapter 11 plan of reorganization, and formed the basis for the Valaris reorganization. The ad hoc group also agreed to provide $500 million in debtor-in-possession financing, which was approved by the bankruptcy court following a contested two-day trial in September 2020. The restructuring also featured a successful rights offering of $550 million of new secured notes, backstopped in large part by the ad hoc group.

 

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