Davis Polk advised an ad hoc group (the “Ad Hoc Group”) of prepetition secured term lenders and DIP term lenders in connection with the chapter 11 cases of McDermott International, Inc. and its affiliated debtors (collectively, “McDermott”). McDermott filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on January 21, 2020—the same day that McDermott, the Ad Hoc Group, the prepetition LC lenders, an ad hoc bondholder group and other parties entered into a comprehensive restructuring support agreement (the “RSA”)—in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.

McDermott’s prepackaged plan of reorganization (the “Plan”) was confirmed on March 12, 2019, providing for, among other things, an equitization of approximately $4 billion of debt, with Ad Hoc Group member receiving their pro rata share of 94% of reorganized equity and $500 million of take-back debt and the sale of McDermott’s Lummus Technology business for $2.725 billion to a joint partnership between Chatterjee Group and Rhône Group (the “Sale”) to, among other things, repay the DIP facility. On June 30, 2020, upon the consummation of a series of transactions contemplated by the Plan, including the closing of the Sale, reorganized McDermott emerged from bankruptcy with a revamped capital structure, including new term loan and letter of credit exit facilities and a newly constituted Board of Directors.

McDermott is a fully integrated provider of engineering, procurement, construction and installation and technology solutions to the energy industry.  McDermott’s proprietary technologies and services are utilized for offshore, subsea, power, liquefied natural gas and downstream energy projects around the world. Their customers include national, major integrated and other oil and gas companies and producers of petrochemicals and electric power.

The Davis Polk restructuring team included partners Damian S. Schaible and Natasha Tsiouris and associates Daniel Rudewicz and Richard J. Steinberg. The finance team included partner Monica Holland, the corporate team included partner Brian Wolfe and associate Molly I. Manning and partner Adam Kaminsky provided executive compensation advice. The capital markets team included partner Nicholas A. Kronfeld and partner William A. Curran provided tax advice. All members of the Davis Polk team are based in the New York office.

 

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