Hercules Offshore filed its prepackaged Chapter 11 today in Wilmington, Del., the company announced. The company said that lenders holding roughly 99.7% of its first-lien claims voted in favor of the proposed reorganization plan.
As reported, the company announced late last month that it would solicit acceptances to a prepackaged reorganization plan and file for Chapter 11. As also reported, the company only emerged from Chapter 11 last November with a new $450 million senior secured facility in place that was backstopped by a group of the company’s then bondholders (“Hercules Offshore emerges from Chapter 11,” LCD, Nov. 6, 2015).
The company said that under the terms of the current reorganization plan, the company’s assets would be marketed for sale, with those left unsold at the completion of the Chapter 11 process placed into a wind-down vehicle until sales are finalized.
The company’s international subsidiaries are not included as part of the Chapter 11 case, but will be part of the sale process, the company said.
Unsecured creditors will be paid in full in the ordinary course of business or at the completion of the Chapter 11 process.
Shareholders would receive $12.5 million in cash and interests in the wind-down vehicle if they vote as a class to accept the plan, or just interests in the wind-down vehicle if the class votes against the plan.
“Importantly,” the company said, “shareholders will have to wait until the lenders are paid in full before receiving any recovery on their interests if the class votes to reject the plan as opposed to receiving their pro rata share of $12.5 million on the effective date of the plan and incremental cash distributions thereafter based on the success of the sale process if the class votes to accept the plan.”
The company said it is continuing to solicit votes on the proposed plan from Hercules shareholders.
Akin Gump Strauss Hauer & Feld is the company’s legal counsel, PJT Partners is the company’s financial advisor, and FTI Consulting its restructuring advisor. — Alan Zimmerman
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