Davis Polk advised an ad hoc group of secured term loan lenders to California Resources Corporation (“CRC”) and certain of its subsidiaries in its chapter 11 restructuring. On October 13, 2020, the U.S. Bankruptcy Court for the Southern District of Texas approved CRC’s plan of reorganization on an uncontested basis. Upon its emergence from bankruptcy on October 27, 2020 as a public company, CRC issued new shares of common stock and warrants. Under the plan, $4.4 billion of loans and notes were equitized. The ad hoc group, represented by Davis Polk, provided the company with $650 million in debtor-in-possession financing during the case, which was repaid in full upon emergence and backstopped both a $450 million equity rights offering and $200 million second-lien exit facility. At emergence, the ad hoc group was anticipated to own approximately 60% of the pro forma equity in CRC. The company’s common stock began trading on the New York Stock Exchange under the ticker “CRC” on October 28, 2020.

CRC is an oil and gas company headquartered in California and is the state’s largest oil and natural gas producer. At the time it filed for bankruptcy protection, CRC had more than $5 billion in funded secured and unsecured debt obligations.

The Davis Polk restructuring team included partners Damian S. Schaible and Angela M. Libby and associates Jonah A. Peppiatt and Heather Weigel. The finance team included partner Kenneth J. Steinberg, counsel Jon Finelli and associate Bernard Tsepelman. The corporate team includes partners John G. Crowley and Evan Rosen and associate Shanu A. Bajaj. All members of the Davis Polk team are based in the New York office.