California Resources Corporation Restructures
California Resources Corporation, the largest oil and natural gas producer in California, turned to S&C when it needed to restructure $4.4 billion in debt. We helped the company arrange $1.1 billion debtor-in-possession financing and negotiate a consensual Chapter 11 plan of reorganization, enabling it to emerge from bankruptcy protection in just three months.
In addition to restructuring debt, we advised CRC as it negotiated with Ares Management L.P. to take over Ares’ interest in Elk Hills Power, which powers CRC’s oil and gas operations. Ares agreed to exchange its joint venture interests for equity and CRC notes, leaving CRC as the sole owner of the power generation assets.
CRC’s complex restructuring is one example of the breadth of challenges our Restructuring practice routinely handles. Collaborating with colleagues throughout S&C’s practice groups, our lawyers represent a range of participants, including debtors, lenders and private equity investors, as well as sovereign entities. In other recent matters we have advised:
- LSC Communications as lead debtor's counsel to the printing company in its Chapter 11 proceeding.
- Garrett Motion Inc. as lead debtors counsel in its Chapter 11 proceeding, involving debtors in the United States and more than 20 international jurisdictions.
- The Interim Government of the Bolivarian Republic of Venezuela as it develops a plan to restructure more than $150 billion in debt.
- The Ministry of Finance of Belize in obtaining debt relief from bondholders in response to the COVID-19 crisis.
- Lion Capital in its affiliate's court-approved acquisition of substantially all of the assets of John Varvatos Enterprises.
- Deerfield Management Company as senior secured creditor, DIP lender and plan sponsor in the Chapter 11 proceedings of health care companies Endologix and Melinta Therapeutics; and as the largest second lien holder in the restructuring of Mallinckrodt.
Jim Bromley provides restructuring and related bankruptcy litigation advice to clients across a range of industries, including automobile, aviation, consumer & retail, energy, financial services, manufacturing, mining, telecommunications and shipping. He represents debtors and investors, as well as creditors and sovereign entities.
Andy Dietderich helps clients resolve balance sheet concerns through a range of approaches, including: helping companies avoid insolvency proceedings by advance planning and liability management transactions; executing Chapter 11 solutions where no alternative is feasible; and resolving complex insolvency-related disputes. He likewise helps debtors, creditors and government actors in aviation, energy, consumer & retail, financial services and technology, among other industries.
Learn more about our Restructuring and Bankruptcy Litigation practices and explore our insights in the following recent podcasts and articles.
- Critical Insights Podcast: Fiduciary Duty Conversations During COVID-19: Ways to Save a Business
- Critical Insights Podcast: Best Practices for Boards Navigating Bankruptcy
- Critical Insights Podcast: Business Continuity Planning for Boards During COVID-19
- Bloomberg Law Article: Fiduciary Duties in the Zone of Insolvency