Yet another company in the energy sector has filed for bankruptcy protection. On June 17, 2016, Maxus Energy Corporation, and its affiliates (“Debtors”) filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.
A significant portion of this post draws upon information in the first day declaration of Javier Gonzalez [D.I. 2] (the “Declaration”). The Debtors’ business is comprised of three principal components: (i) management of various oil and gas-related interests held by Maxus and its subsidiaries, (ii) environmental remediation management services, and (iii) management of legacy employee benefit obligations to retired former employees.
The Debtors have obtained DIP financing sufficient to carry this case for twelve months, having determined that the “Chapter 11 Cases will provide the Debtors with the opportunity to assess whether the Debtors’ existing environmental remediation operations and/or oil and gas operations can be restructured as a sustainable, stand-alone enterprise.” Declaration at *6. Thus, we can’t be sure if this will liquidate, like so many energy companies have in recent months, or reorganize with the hopes of tapping into an improved climate for energy companies. The first day hearing is scheduled for today (6/20/2016) at 5:00 p.m. ET.
The case is pending before the Honorable Christopher S. Sontchi. The Debtors are represented by the law firm of Young, Conaway, Stargatt & Taylor. This is case number 16-11501-CSS. The proposed claims and noticing agent in this case is Prime Clerk LLC. Prime Clerk has established a website for this case at https://cases.primeclerk.com/maxus/.
The primary source of liabilities are the environmental remediation obligations held by the Debtors. As I have seen in other cases, environmental liabilities can be crushing. Luckily, my experience with environmental remediation issues came under the tutelage of Jeff Pollock, in our Princeton office (who is regularly recognized as a top environmental lawyer).