Davis Polk is advising an ad hoc group of lenders under a $550 million prepetition term loan B credit facility in the chapter 11 restructuring of Philadelphia Energy Solutions Refining and Marketing LLC and certain of its affiliates.

On March 26, 2018, Philadelphia Energy’s prepackaged plan of reorganization, which Davis Polk played a leading role in structuring and negotiating, was confirmed during an uncontested confirmation hearing by the Honorable Kevin Gross of the Bankruptcy Court for the District of Delaware.

At the outset of the chapter 11 cases, members of the ad hoc group and certain other term loan B lenders provided a $120 million debtor-in-possession credit facility. Upon effectiveness of the plan, the full principal balance of the DIP facility and $107 million of the prepetition term loan B will be converted into new loans pursuant to a senior secured unitranche term loan exit credit facility. The remainder of the prepetition term loan B credit facility will be equitized, and the term loan B lenders will receive approximately two-thirds of the reorganized company’s equity. DIP lenders will also receive a portion of the reorganized equity at emergence on account of their financing commitment.

Philadelphia Energy owns and operates the Point Breeze and Girard Point oil refineries located on an integrated, 1,300 acre refining complex in Philadelphia. The 335,000 barrels per day of combined capacity makes Philadelphia Energy the largest refining complex on the Eastern Seaboard.

The Davis Polk restructuring team included partner Damian S. Schaible and associates Aryeh Ethan Falk and Jonah A. Peppiatt. The finance team included partner Joseph P. Hadley, counsel Christian Fischer and associate Matthew W. Levy. The corporate team included partner Stephen Salmon and associate Bryan M. Quinn. Counsel Ethan R. Goldman and associate Andrew Imber provided tax advice. Members of the Davis Polk team are located in the New York and Northern California offices.

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