Davis Polk Advises EdgeMarc Energy on the Sale of Its Pennsylvania Assets to KB OREO LLC and Entry Into a Global Settlement
3/16/2020

Davis Polk advised EdgeMarc Energy Holdings, LLC and its affiliates (together, “EdgeMarc”) in connection with the sale of its Pennsylvania assets to KB OREO LLC (an affiliate of KeyBank, the secured lender under EdgeMarc’s DIP credit facility) and in connection with its entry into a global settlement with KeyBank, the Official Committee of Unsecured Creditors, and ETC Northeast Pipeline, LLC, a midstream services provider. 

The global settlement resulted from months of negotiations, and against a backdrop of litigation with ETC after a rupture of ETC’s pipeline resulted in a shutdown of EdgeMarc’s operations in Pennsylvania. Under the terms of the sale and global settlement, KB OREO LLC will purchase substantially all of EdgeMarc’s assets for approximately $90 million, comprised of a credit bid, cash, and other consideration. The Court approved the global settlement on February 7, 2020 and the sale closed on February 24, 2020.

On May 15, 2019, EdgeMarc filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware to pursue the sale of all or substantially all of its assets pursuant to section 363 of the Bankruptcy Code in order to maximize value for the benefit of its stakeholders.

Based in Carnegie, Pennsylvania, EdgeMarc is a privately-held limited liability company engaged in the acquisition, production, exploration and development of natural gas and natural gas liquids (NGLs) from underground deposits in the Appalachian Basin. EdgeMarc conducts its drilling and exploration activities in the “stacked” liquids-rich Marcellus shale in Pennsylvania and dry gas Utica shale in Ohio. Prior to the sale of its assets, EdgeMarc controlled contiguous positions of approximately 45,000 net acres across Ohio and Pennsylvania.

The Davis Polk restructuring team includes partner Darren S. Klein and associates Aryeh E. Falk, Jonah A. Peppiatt and Matthew B. Masaro. The litigation team includes partner Lara Samet Buchwald and associate R. Brendan Mooney. The finance team includes partner Meyer C. Dworkin and associate Sanders Witkow. The mergers and acquisitions team includes partner Brian Wolfe and associate Matthew J. Cowcher. All members of the Davis Polk team are based in the New York office.