We advised an ad hoc group of noteholders and the indenture trustee in connection with the restructuring

Davis Polk advised an ad hoc group of noteholders holding approximately $422 million or 89% of the face amount of Ruby Pipeline, LLC’s $475 million unsecured notes in connection with Ruby’s chapter 11 case. Davis Polk also advised the indenture trustee for the notes.

On January 13, 2023, the United States Bankruptcy Court for the District of Delaware approved Ruby’s chapter 11 plan, which provided for the sale of Ruby’s pipeline assets to Tallgrass MLP Operations for approximately $282.5 million in cash, the settlement of fraudulent transfer claims against Ruby’s equity sponsors for $135 million in cash and the payment in full in cash of all notes claims, including post-petition interest at the contractual rate plus fees and expenses.

Ruby filed a voluntary chapter 11 petition in the Bankruptcy Court on March 31, 2022. Shortly thereafter, the indenture trustee, the ad hoc group and the official committee of unsecured creditors filed a motion seeking to terminate Ruby’s exclusive period to file a plan, which was contested by the debtor and ultimately resolved consensually by a case protocol that imposed certain milestones with respect to a sale process and plan confirmation process. In November 2022, Ruby sought Bankruptcy Court approval to enter into a stalking horse purchase agreement with and grant bid protections to EP Ruby, LLC, the debtor’s existing operator and common equity owner, which would acquire the reorganized equity of Ruby for $236 million. Davis Polk, in conjunction with counsel to the creditors committee, was successful in objecting to the designation of EP Ruby as stalking horse purchaser, which would not have provided sufficient consideration to pay post-petition interest on the notes. That paved the way to a competitive auction at which Tallgrass prevailed by offering an additional $46.5 million in consideration.

Based in Houston, Texas, Ruby owns and facilitates the operation of a 683-mile-long natural gas pipeline, spanning from the Rockies hub of Opal, Wyoming, to the Malin Hub in Malin, Oregon.

The Davis Polk restructuring team included partners Damian S. Schaible and Darren S. Klein, counsel Aryeh Ethan Falk and associates Samuel Wagreich, Jarret Erickson, David Kratzer and Sophy Ma. The litigation team included partner Elliot Moskowitz, counsel Marc J. Tobak and associates Tess Liegeois and Nicholas D’Angelo. Partner Patrick E. Sigmon and counsel Leslie J. Altus provided tax advice. Partner Leonard Kreynin provided corporate advice. All members of the Davis Polk team are based in the New York office.