Philadelphia Energy’s Chapter 11 Plan of Reorganization

Davis Polk advised Ad Hoc Lender Group in connection with the Confirmation of the Chapter 11 Plan of Reorganization of Philadelphia Energy.

The ad hoc group of lenders, with total holdings of $607 million, includes holdings of the debtors’ first-lien term loan and debtor-in-possession credit facility in the chapter 11 restructuring of Philadelphia Energy Solutions Refining and Marketing LLC and certain of its affiliates.

On February 13, 2020, Philadelphia Energy’s plan of reorganization, which Davis Polk played a leading role in structuring and negotiating, was confirmed during a contested confirmation hearing by the Honorable Kevin Gross of the Bankruptcy Court for the District of Delaware.

The plan provides for the sale of Philadelphia Energy’s equity to Hilco Redevelopment Partners and for the creation of a liquidating trust to facilitate distributions to the debtors’ creditors. Upon effectiveness of the plan, the debtors’ creditors will receive beneficial interests in the liquidating trust and members of the ad hoc group of lenders, as well as the company’s working capital facility provider, ICBC Standard Bank Plc, will appoint trustees to govern the trust. Further, the liquidating trust will oversee continued prosecution of the debtors’ outstanding insurance and tax refund claims, the proceeds of which will be distributed to creditors.

Philadelphia Energy owned and operated the Point Breeze and Girard Point oil refineries located on an integrated, 1,300 acre refining complex in Philadelphia. The two refineries’ 335,000 barrels per day of combined capacity made Philadelphia Energy the largest refining complex on the Eastern Seaboard. Since emergence from their last chapter 11 cases in August 2018, these new chapter 11 cases were filed in the wake of an incident involving an explosion at the alkylation unit at the debtors’ Girard Point refining facility.

The Davis Polk restructuring team included partner Damian S. Schaible (Picture) and associates Aryeh Ethan Falk and Jonah A. Peppiatt. The finance team included counsel Christian Fischer and associates Sarah Hylton and Richard Corbett. The corporate team included partner Harold Birnbaum and associate Divon Rathgeber. The litigation team included partner James I. McClammy, counsel David B. Toscano and associate Eric M. Kim.

Involved fees earner: Harold Birnbaum – Davis Polk & Wardwell; Richard Corbett – Davis Polk & Wardwell; Aryeh Ethan Falk – Davis Polk & Wardwell; Christian Fischer – Davis Polk & Wardwell; Sarah Hylton – Davis Polk & Wardwell; Eric Kim – Davis Polk & Wardwell; James McClammy – Davis Polk & Wardwell; Jonah Peppiatt – Davis Polk & Wardwell; Divon Rathgeber – Davis Polk & Wardwell; Damian Schaible – Davis Polk & Wardwell; David Toscano – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: Philadelphia Energy Solutions Refining and Marketing – Ad Hoc Lender Group;


Author: Ambrogio Visconti