Davis Polk Advises Ad Hoc Group of Secured Lenders in Connection with Dixie Electric’s Chapter 11 Plan of Reorganization
12/14/2018

Davis Polk advised an ad hoc group of secured lenders in connection with the successful chapter 11 restructuring of Dixie Electric, LLC and certain of its affiliates (the “Company”). On December 13, 2018, the Company’s plan of reorganization, which Davis Polk played a leading role in structuring and negotiating, was confirmed by the Bankruptcy Court for the District of Delaware in a fully consensual confirmation hearing. The reorganized Company will have nearly $300 million in funded debt extinguished from its balance sheet, obtain a new $30 million secured term loan exit facility, and significantly reduce its annual debt service and net leverage. Upon emergence from bankruptcy, the parent entity of the Company will be a new corporation under the name Expanse Energy Solutions, Inc.

Prior to the Company’s November 2, 2018 bankruptcy filing, Davis Polk played a critical role in negotiating a restructuring support agreement among the Company, the ad hoc group and certain other parties. Collectively, the members of the ad hoc group hold more than two-thirds of the Company’s prepetition secured loans. The confirmed plan of reorganization extinguishes their prepetition secured loan claims in exchange for their pro rata share of 98.25% of the equity of the reorganized Company. To fund the Company’s ongoing operations and expenses during the chapter 11 cases, the ad hoc group extended a $17.5 million debtor-in-possession credit facility. Upon consummation of the plan of reorganization, the outstanding DIP loans will convert into loans under the new $30 million exit facility, which the ad hoc group is also providing.

Dixie Electric, LLC (dba Expanse Energy Solutions) is a privately held provider of electrical infrastructure and related services to the oil and gas industry. The Company’s corporate headquarters is located in Houston, Texas.

The Davis Polk restructuring team included partner Damian S. Schaible, counsel Christian Fischer and associates Adam L. Shpeen and Erik Jerrard. The corporate team included partner Stephen Salmon and associate Jeffrey C. Lau. Partner William A. Curran and associate Tracy L. Matlock provided tax advice. Counsel Ron M. Aizen provided executive compensation advice. Counsel Lawrence R. Plotkin provided real estate advice. Members of the Davis Polk team are based in the New York and Northern California offices.