Davis Polk advised Cortland Capital Market Services LLC as administrative agent under prepetition and debtor-in-possession credit facilities, and a steering committee of secured lenders to C&J Energy Services Ltd. and certain of its subsidiaries (collectively, “C&J”) in connection with their successful chapter 11 restructuring. C&J’s plan of reorganization, which Davis Polk played a leading role in structuring and negotiating, was confirmed by the Bankruptcy Court for the Southern District of Texas on December 16, 2016 and became effective today. Under the plan, C&J’s prepetition secured lenders agreed to equitize approximately $1.38 billion of debt and invest an additional $200 million of new equity through a rights offering that is fully backstopped by the members of the steering committee along with certain other parties. In exchange for this consideration, prepetition secured lenders are receiving substantially all of the new common stock of reorganized C&J, subject to dilution by a management incentive plan and the issuance of warrants for the benefit of junior stakeholders. In connection with the plan, C&J has also raised a $100 million ABL facility, providing the reorganized company with access to $300 million in aggregate new liquidity and an otherwise delevered balance sheet as it emerges from chapter 11.

Before C&J’s July 20, 2016, bankruptcy filing, Davis Polk represented Cortland and the steering committee in negotiating the terms of a comprehensive restructuring support agreement and $100 million debtor-in-possession financing facility. During C&J’s chapter 11 cases, Davis Polk also advised Cortland and the steering committee with respect to, among other things, extensive negotiation of the terms of the plan, which were initially set forth in the restructuring support agreement and subsequently revised pursuant to settlements reached with the Official Committee of Unsecured Creditors and Nabors Industries, C&J’s pre-restructuring parent company, respectively; numerous litigation matters related to the plan, the DIP facility and C&J’s prepetition activities; the corporate governance and structuring of new debt and equity for the reorganized company; and the negotiation of employment agreements and incentive compensation plans for C&J’s executives.

C&J is a provider of well construction, well completions and well services to the oil and gas industry. As one of the largest completion and production services companies in North America, C&J provides a suite of services for the entire life cycle of the well, including cementing, directional drilling, fracturing, coiled tubing, wireline, rig services, fluids management and numerous complementary services.

The Davis Polk insolvency and restructuring team included partners Timothy Graulich and Damian S. Schaible, counsel Steven Z. Szanzer and associate David Schiff. The finance team included partner Jinsoo H. Kim and associate Eitan M. Goldberg. The corporate team included partner Stephen Salmon and associate Bryan M. Quinn. The litigation team was led by partner Elliot Moskowitz. Members of the Davis Polk team are based in the New York and Northern California offices.