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Texas (Restructuring) Success!
The recent oil bust had a devastating effect on U.S. energy companies. Oil prices hovered at unsustainable levels, even for Texas producers. Wells sat idle. It just didn’t pay to keep pumping.
Numerous oil producers tumbled into bankruptcy, causing a ripple effect of financial hardship across the industry for those that served them. Companies like Loeb & Loeb client C&J Energy Services, a Houston-based provider of onshore well construction and intervention, completion and production, and other oilfield services.
At the time we were brought in to help, C&J — once a rapidly growing public company with operations across the U.S. and western Canada — was faced with unsustainable debt.
A team of Loeb’s bankruptcy and finance lawyers worked together with the company’s other restructuring professionals to guide C&J through a voluntary restructuring that had it in and out of the Chapter 11 reorganization process in less than six months — with a much healthier balance sheet.
Through the restructuring, C&J negotiated an agreement with its lenders that eliminated entirely the $1.4 billion in bank debt on the books through a debt-to-equity conversion. The restructuring also provided C&J with a $100 million senior secured credit facility and enabled the reorganized company to raise an additional $200 million through an equity rights offering.
Throughout the Chapter 11 process, the company was able to continue day-to-day operations, preserving thousands of jobs in the U.S. and Canada.
Even after the restructuring was complete, Loeb’s work was far from done. Since C&J emerged from Chapter 11, our lawyers have helped the company resolve nearly 5,000 unsecured creditor claims, including significant tax claims, and guided C&J through discharged pre-bankruptcy litigation.
The energy sector remains a volatile industry, buffeted by political and market forces both at home and abroad. With Loeb’s help, C&J Energy Services was able to respond proactively in a fiercely challenging environment. Today, the company is better-equipped to take advantage of upswings and weather market dips, and to invest in advancements in technology that responsibly drive cost savings and efficiency for the energy industry of tomorrow.