Alkegen prearranged chapter 11 filing and restructuring support agreement

Davis Polk is advising an ad hoc group of lenders in connection with Alkegen’s $3.5 billion chapter 11 filing in the U.S. Bankruptcy Court for the Northern District of Texas. On July 19, 2026, members of the ad hoc group entered into a restructuring support agreement in connection with the filing that is supported by holders of approximately 99% of the debtors’ more than $2 billion of first-lien debt and 80% of the debtors’ nearly $1 billion of second-lien debt. Alkegen filed a straddle prepackaged plan of reorganization that is expected to eliminate approximately $3.1 billion of debt while leaving trade creditors unimpaired and positioning the company to emerge as a healthier go-forward enterprise. 

Members of the ad hoc group have committed to provide a $630 million debtor-in-possession financing facility, consisting of $315 million of new money and a $315 million roll-up on a 1:1 basis. The financing, which rolls into a $315 million exit facility in part and is taken out by an equity rights offering in part, is intended to fund the chapter 11 cases, repay the outstanding prepetition revolving credit facility and support the debtors’ operations during the cases. 

At the first-day hearing, Judge Scott Everett approved the interim debtor-in-possession order and other first-day relief, including the RCF repayment and interim roll-up. Alkegen’s proposed plan of reorganization provides for first-lien secured claims to receive their pro rata share of $85 million of exit term loans and 100% of the new equity interests, subject to dilution from an equity rights offering backstopped by certain members of the ad hoc group, as well as subscription rights to participate in the rights offering. Holders of unsecured funded debt claims (including first-lien deficiency claims, second-lien claims and stub debt from the company’s 2024 LME) receive their pro rata share of new equity warrants and certain primary equity interests.

Alkegen is a specialty materials company, focusing on the production of battery technologies, electric vehicles, filtration media and specialty insulation materials aimed at enhancing energy efficiency, safety and sustainability. The company operates over 60 facilities worldwide and employs around 9,000 people.

The Davis Polk restructuring team includes partners Damian S. Schaible and Angela M. Libby, counsel Jarret Erickson and associate Jacob Goldberger. The finance team includes partners Kenneth J. Steinberg and David J. Kennedy and associate Adis Terzic. The mergers and acquisitions team includes partner Lee Parnes and counsel Jacob S. Kleinman. Counsel Brian Hecht is providing capital markets advice. Partner Corey M. Goodman and counsel Yixuan Long are providing tax advice. All members of the Davis Polk team are based in the New York office.