Philadelphia Energy Chapter 11 Filing and $100 Million DIP Financing Facility
7/26/2019

Davis Polk is advising an ad hoc group of prepetition term loan lenders and initial debtor-in-possession financing lenders in the chapter 11 restructuring of Philadelphia Energy Solutions Refining & Marketing, LLC, PES Holdings, LLC and certain of their affiliates. Philadelphia Energy owns and operates the Point Breeze and Girard Point oil refineries located on an integrated, 1,300-acre refining complex in Philadelphia. When fully operational, the company’s combined distillation and refining capacity of 335,000 barrels per day makes it the largest refining complex on the Eastern seaboard. On June 21, 2019, Philadelphia Energy suffered a catastrophic incident involving an explosion at the alkylation unit of the Girard Point Refinery, and the resulting damage made the Girard Point refinery inoperable. On July 21, 2019, Philadelphia Energy filed for chapter 11 in the United States Bankruptcy Court for the District of Delaware. 

In connection with the filing, members of the ad hoc group, who collectively hold a majority of loans outstanding under the company’s $699 million prepetition term loan credit facility, committed to provide a $100 million debtor-in-possession financing and funded an initial $65 million draw. The debtor-in-possession financing was approved on an interim basis at the debtors’ “first day” hearing on July 23, 2019. The financing will enable the company to properly secure and maintain the facility and cover other expenses during its restructuring process. 

The Davis Polk restructuring team includes partner Damian S. Schaible, counsel Christian Fischer and associates Aryeh Ethan Falk, Jonah A. Peppiatt and Alexander K.B. Shimamura. The finance team includes partner Joseph P. Hadley and associate Sarah S. Hylton. The litigation team includes partner James I. McClammy, counsel David B. Toscano and associate George Carotenuto. All members of the Davis Polk team are located in the New York office. 

Houlihan Lokey Capital, Inc. is acting as financial adviser to the term loan lender group.