On Sunday, June 28, 2020, Chesapeake Energy Corp. (Chesapeake), a fracking trailblazer that was once the second-largest domestic producer of natural gas, filed for voluntary Chapter 11 protection in the Southern District of Texas to facilitate a comprehensive balance sheet restructuring. In connection with the filing, Chesapeake entered into a Restructuring Support Agreement with certain of its creditors that contemplates a plan of reorganization permitting Chesapeake to eliminate approximately US$7 billion of debt.
Sidley represents one of the largest creditors in the case, MUFG Union Bank, N.A. (MUFG), as administrative and collateral agent on Chesapeake’s US$3 billion senior secured reserve-based revolving credit facility, as lead arranger and administrative agent on the US$925 million new money debtor-in-possession financing, and as lead arranger of a US$2.5 billion exit financing to consist of a US$1.75 billion reserve-based revolving credit facility and a US$750 million first lien last out term loan.
The Sidley partners who represent MUFG include Restructuring partners Jennifer C. Hagle (Los Angeles), Duston K. McFaul (Houston) and Dennis M. Twomey (Chicago), Energy partner Brian E. Minyard (Houston), and Insurance partner Ellen P. Pesch (New York).