Davis Polk advised 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 August 7, 2018, Philadelphia Energy emerged from chapter 11 under the terms of its prepackaged plan of reorganization, which Davis Polk played a leading role in structuring and negotiating.

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 approximately $420 million of the prepetition term loan B were 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 was equitized and the term loan B lenders received approximately two-thirds of the reorganized company’s equity. DIP lenders also received 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, Pennsylvania. 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, Jonah A. Peppiatt and Omer Netzer. The finance team included partner Joseph P. Hadley and counsel Christian Fischer. The corporate team included partner Stephen Salmon and associate Bryan M. Quinn. Counsel Ethan R. Goldman provided tax advice. Partner James I. McClammy advised on litigation issues. Members of the Davis Polk team are located in the New York and Northern California offices.

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