Davis Polk Advises Chaparral Energy on Entry into Restructuring Support Agreement, Filing for Chapter 11, and Settlement of Longstanding Litigation
8/21/2020

Davis Polk is advising Chaparral Energy, Inc. and its subsidiaries in connection with its restructuring under chapter 11 of the Bankruptcy Code. Chaparral intends to use the restructuring process to implement a prepackaged plan of reorganization that will effectuate a balance sheet restructuring and exit financing in the form of a committed exit revolving credit facility and a fully backstopped rights offering for $35 million of convertible notes.

Chaparral entered into a restructuring support agreement on August 15, 2020, with holders of (i) approximately 78% in aggregate principal amount of loans under the company’s prepetition reserve-based revolving credit facility and (ii) approximately 78% in aggregate principal amount of the company’s approximately $300 million in aggregate principal amount of 8.75% senior unsecured notes.

Chaparral launched solicitation of the prepackaged plan on August 15, 2020, and commenced chapter 11 proceedings on August 16, 2020, in the United States Bankruptcy Court for the District of Delaware. On August 18, 2020, Judge Mary F. Walrath approved all of Chaparral’s requested relief, including the consensual use of cash collateral and authority to pay trade, royalty, and employee claims in the ordinary course.

Davis Polk also advised the company on the settlement of a longstanding litigation related to a royalty class action, which settlement will be implemented through the chapter 11 cases.

Chaparral is a publicly traded independent oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma. The company is involved in the acquisition, exploration, development, production and operation of oil and natural gas properties, with a focus in Oklahoma’s hydrocarbon rich Mid-Continent Region.

The Davis Polk restructuring team includes partners Damian S. Schaible and Angela M. Libby and associates Jacob Weiner, Daniel Rudewicz and Paavani Garg. The litigation team includes partner James I. McClammy and associate Sean Stefanik. The tax team includes partner William A. Curran and associate Ariel David Siman. The corporate team includes partner Nicholas A. Kronfeld. The finance team includes partner Kenneth J. Steinberg. Partner Jeffrey P. Crandall is providing executive compensation advice. All members of the Davis Polk team are based in the New York office.